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Continued t e item three months in
STAFF REPORT order for staff to conduct additional
study. (3-1, Benson N0, Harnik ABSENT)
REQUEST: THAT THE CITY COUNCIL MEMBERS PROVIDE STAFF
DIRECTION CONCERNING ANNEXATION OF AREAS NORTH OF
THE INTERSTATE 10.
SUBMITTED BY: Lauri Aylaian, Director of Community Development
DATE: April 11, 2013
CONTENTS: 1. March 2012 Staff Report with Fiscal Impact Analysis (including
Technical Addendum) for Potentiat Annexation to the City of Palm
Desert, dated 8 February 2012
2. City of Palm Desert City Council Meeting Minutes for relevant
portions of the 26 January, 23 February, and 8 March 2012
meetings
3. Staff Report and Draft Fiscal Analysis and Plan for Services for
the City of Cathedral City Sphere of Influence within the
Unincorporated Community of Thousand Palms
Recommendation
By minute motion: That the City Council direct staff regarding further
actions to take, if any, concerning potential annexation of areas north of
Interstate 10.
Backaround
In recent years, Palm Desert policy makers have addressed several times the question
of whether, and in what configuration, to annex areas north of Interstate 10 into the City.
Most recently, in March 2012, the City Council received and reviewed a fiscal impact
analysis (attached) that was prepared io study the potential annexation of the Sun City
Palm Desert area and unincorporated iands to the west; one option was for the Sphere
of Influence (SOI) lands that are north of interstate 10 (described as Scenario A in the
report), and another option was for the same area �lus land wiihin Cathedral City's SOI
east of Jack Ivey Ranch (Scenario B). Scenario B lands include the Classic Club,
Xavier Preparatory High School, and vacant lands on either side of Cook Street, which
connects the area directly to Palm Desert. U(timately the City Council continued staff's
request for direction to a date uncertain.
Staff Report
Potential Annexation Areas North of I-10
April 11, 2013
Page 3 of 4
Because the proposed Cathedral City annexation area (outlined in red) involves areas
that Palm Desert studied last year for annexation, it is appropriate that the City Council
determine now if they want to pursue annexation of these areas. Cathedral City is
moving quickly towards annexation, which would preclude Palm Desert from having the
opportunity to annex this area in the future. Although annexing land in the sphere of
influence of another city is possible, it becomes increasingly difficult to do so as the land
proceeds through the annexation process of the other city.
In light of Cathedral City's impending annexation goals, staff requests direction from the
City Council. Possible courses of action include:
Do nothing. Determine that Palm Desert 's growth and build out will focus on
areas in current city limits and the Palm Desert SOI, and will not include any
portion of the land that is currently in Cathedral City's sphere of influence.
2. Restudy potential revenue. Direct staff to identify and quantify additional revenue
streams and land use changes that would be necessary to make cost neutral the
annexation of some or all of the areas in question. This should be accompanied
by informing LAFCO that Palm Desert will be requesting that the easternmost
portion of the Cathedral City sphere of influence be detached from Cathedral
City's sphere and annexed into Palm Desert's sphere.
3. Initiate annexation activity. Direct staff to retain a consultant to prepare the fiscal
analysis and Plan for Services necessary to submit to LAFCO an application for
annexation of areas north of Interstate 10. This could be done for either
Scenario A(Sun City and associated areas currently in Palm Desert's SOI) or for
Scenario B(Scenario A area I�us the land east of Jack Ivey Ranch that is out of
the Multi Species Habitat Conservation Plan conservation area).
Fiscal Analvsis
The information produced during the study prepared for Palm Desert in 2012
demonstrates that neither area (described as Scenarios A and B in the analysis) north
of Interstate 10 is financially viable under the conditions analyzed, and that annexation
would pose a burden on the General Fund. More particularly, at build-out the annual
costs would exceed annual revenues as follows:
Scenario A(Sun City and area south of Avenue 38): -$5.5 million/year
Scenario B(Scenario A plus Classic Club and Xavier Prep area): -$3.4 million/year
This adverse impact on the General Fund could be mitigated by such mechanisms as
fiscalization of land use and augmenting revenue through assessment of a parcel tax or
g:�planningUauri aylaian\staff reports�.sun dty annexation 4-11-13 (2).docx
Staff Report
Potential Annexation Areas North of I-10
April 11, 2013
Page 4 of 4
creation of a community facilities district. Whether or not an annexation could ever be
revenue neutral is uncertain and would require additional study.
The cost of preparing a detailed fiscal impact analysis and Plan for Services sufficient to
meet the requirements of LAFCO's annexation application would be less than $50,000.
No money is contained in the current budget for such a study. If desired by the City
Council, an appropriation from the unobligated General Fund would be needed.
Submitted By: _ �
/ �
� ` �_�
/
�Lauri Aylaian, Community Development Dir�tor
Department Head:
Paul S. Gibson,�Director of Finance
�
�anager
g:\planningVauri aylaian\staH reports�sun city annexation 4-11-13 (2).docx
* Continued to a date unceri�in for further ongoing
review of the mattet as it relates to future
planning activities in the City. 4-0 (Harnik ABSENT)
CITY OF PALM DE
DEPARTMENT OF COMMUN
STAFF REPORT
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REQUEST: THAT THE CITY COUNCIL RECEIVE AND FILE DOCUMENTS
PERTAINING TO THE POTENTIAL FISCAL IMPACT OF
ANNEXATION OF AREAS NORTH OF THE INTERSTATE 10, AND
PROVIDE STAFF DIRECTION CONCERNING PROCEEDING ON
THIS MATTER
SUBMITTED BY:
DATE:
CONTENTS
Recommendation
Lauri Aylaian, Director of Community Development
March 8, 2012
1. Technical Addendum to Fiscal Impact Analysis for Potential
Annexation to the City of Palm Desert, dated February 8, 2012
2. Memorandum from Terra Nova Planning & Research regarding
Clarification of Gas Tax and Measure A Revenues, dated
February 21, 2012
3. Memorandum from Director of Public Works regarding Capital
Improvements Needs in the Sun City Area, dated February 15,
2012
By minute motio
actions to take, if
10.
Backaround
n: That the City Council direct staff regarding further
any, concerning annexation of areas north of Interstate
This report provides supplemental information to the Fiscal Impact Analysis for Potential
Annexation to the City of Palm Desert, which was presented to the City Council at its
January 26, 2012, meeting. In particular, a technical addendum that corrects for an
invalid land use assumption is provided, as is a memorandum explaining the
computation of Highway Users Gas Tax and Measure A Fund revenues. Additionally,
the Director of Public Works has provided an order-of-magnitude estimate of the capital
cost for filling existing infrastructure needs in the study areas. This information is not
generally included in a fiscal impact analysis, since the goal of such analyses is to
determine the financial viability of an area once it has been fully developed and the
infrastructure is complete. Nonetheless, it is useful information for a complete picture of
the financial impact that annexation would have on the City of Palm Desert.
�
Staff Report
Potentiai Annexation Fiscal lmpact Analysis
March 8, 2012
Page 2 of 2
�
The information produced during the study demonstrates that neither area (described as
Scenarios A and B in the analysis) north of Interstate 10 is financially viable under the
conditions analyzed, and ihat annexation would pose a burden on the General Fund.
More particularly, at build-out the annual costs would exceed annual revenues as
fol(ows:
Scenario A(Sun City and area south of Avenue 38): -$5.5 million/year
Scenario B(Scenario A plus Classic Club and Xavier Prep area): -$3.4 miilion/year
While one-time costs and revenues would be as follows:
Scenario A: $22 million cost for meeting existing infrastructure needs
$10.2 miHion total revenue from Developer Impact Fees through build out
Scenario B: $44 millior� cost for meeting existing infrastructure needs
$18.9 million total revenue from Developer Impact Fees through build out
If required by the Local Agency Formation Commission (LAFCO), inclusion oi Bermuda
Dunes in these analyses would further diminish the financial viabilities of any proposed
annexation.
Fiscal Analvsis
There is no fiscal impact with this request. If further study is directed by the City Council,
additional appropriations will be required for consultants.
Submitted By:�
�--��"-���" ��-�"�
�..-
Lauri Aylaian, Community Development Director
Department d:
���t�
�-e (�-
Paul S. � n, Dire�
Approval:
/ �'C�-
Finance
CiiJ
ath, City Manager
g.\planningVauri aytaian�sphere ot inftuence and annexation�sun dty annexffiion flscat Impad analysis 3-&12.doac
CITY OF PAL.M DESERT
DEPARTMENT OF COMMUNITY DEVELOPMENT
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 staif to obtain a feasibility study on territory north
of Interstate 10 (l-t0) 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
I-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, whi{e 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 �undaries of this option, called Scenario A, are as outlined in red on the
following map.
Potential Annexation Fiscai Impact Analysis
26 January 2012
Page 2 of 5
The Scenario B anaiysis 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 boih sides of
Cook Street, but excludes Jack tvey Ranch. Scenario B boundaries are as shown below.
g:�planningUauri aylaianlstaH reportslsun city annexation fiscal impact analysis 1-2612.docx
Potentiai Annexation Fiscal Impact Analysis
26 January 2012
Page 3 of 5
The resuits 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 shortfail is the high percentage of residentiai 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 I-10. Specifically, the following
precepts were judged to be key for a valid calculation of fiscal impact:
• Undevelvped 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 i% 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 (ERA�').
Approximately half of the 7°!o 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 resuft of annexation, while others will not. For instance, staffing
levels, benefits, and overhead costs should not change for the Ciry Manager's office,
the City Council, and departments such as Finance, Special Events, and Risk
Managernent. 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
g:lplanningVauri aylaianlslaff reportslsu� clty 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 Analvsis
The findings of the fiscal impact analysis are briefly summarized here.
Scenario A
Annexation af Scenario A wiN add an estimated 15,144 residents to the City of Palm Desert. 8uiid
out of this area is projected to occur in ten years, at which time potentially $6.9 mi!lion annuaNy in
revenues would be ganerated. The largest single revenue generator is expected to be local Sales
Tax ($2.3 miUion annually at 10-year build out), which is related to the second highest revenue
source, Structural Fire Tax 4$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 annuaily at the end af the 10-year build out period. The most significant
costs are those from Police Protection ($52 million annually at build out), closely foHowed by those
from General Government operations ($4.2 million annually at build out).
As such, development of the area is expected ta 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 develapment in the area and the costs of
providing services to residents, and a comparatively smali percentage of commercial sales tax-
generating deveiopment. Residential iands 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 1 Q-year build out period.
The highest sources of DIF revenue will be from the New Construction Tax and the Park 8�
Recreation Facilities Fund, which will benefit fram the fu#ure construction of new single-famiiy and
multi-family dwelling units in the annexation area, particularly those in the Mirasera Specific Pian.
Scenario B
Annexation of Scenario B will result in a population increase of approximately 15,779 to the City
of Palm Desert. Buiid 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
mil(ion annualiy. As with Scenario A, the fargest revenue source wiil be local Sales Tax ($3.9
million annuaiiy), 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 govemment services ($4.49 million) to existing and future residents.
g:tplanningVauri aylaiar�lstaff reports�sun city anr�exaiion fiscal impact analysis 1-26-12.docx
Potential Annexation Fiscal Impact Analysis
26 January 2012
Page5of5
Build out of Scenario B is expected to generate an annual revenue shortfall of
approximately $3.9 miliion at the end of the first five-year buiid out pericd. However, the
shortfall is projected to fail slightly ta $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:
�
_--�J
' Lauri Aylaian �
Director of Community Development
Revi by:
P Gibson
Director of Finance
�� J
M. Wohlmuth, City Manager
g:lplanningUauri aylaianlstaff r�eports�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 \
�� Terra Nova Planning & Research, Inc.�
42635 Melanie Place, Suite 101
Palm Desert, CA 92211 '
January 2012
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anne�.ation
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
�
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anneaation
LIST OF EXHIBITS
E�ibit 1: Scenario A Annexation Boundary Map
Exhibit 2: Sphere-of-Influence Map
Exhibit 3: Specific Plans Map
Exhibit 4: Land Use Map
Exhibit 5: Scenario B Annexation Boundary Map
LIST OF TABLES
Table 1:
Table 2:
Table 3:
Table 4:
Table 5:
Table 6:
Table 7:
Table 8:
Table 9:
Table 10:
Table 11:
Table 12:
Table 13:
Scenario A Developed Acreage
Scenario A Vacant Acreage
Scenario B Developed Acreage
Scenario B Vacant Acreage
Average Value of New Construction in Palm Desert
Components of the 8.75% Sales & Use Tax
Low-Income Housing Mitigation Fees
Child Care Facilities Impact Mitigation Fees
Annual Road Maintenance Costs, 2002-2011
Total Potential Costs/Revenues Summary Table — Scenario A
Developer Impact Fees Revenues — Scenario A
Total Potential Costs/Revenues Summary Table — Scenario B
Developer Impact Fees Revenues — Scenario B
6
7
8
11
13
9
10
14
15
19
20
24
24
29
38
39
40
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 Anne�.ation
CITY OF PALM DESERT
POTENTIAL ANNEXATION
FI5CAL 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.
3
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Annelation
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
Terra Nova/Ciry of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
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 Annesation
A land use map for both Scenarios A and B is provided in E�chibit 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 Acrea�e
Existing Existing Existing
Dwelling Square Hotel Existing
Land Use Designation Acreage Units Footage2 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 -- 50,000° 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. Ca Industrial - Light 56.6 -- 542,409 -- --
SP-28l Fire Station 3.5 -- -- -- --
I-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
' Assumes that commercial & industrial building squaze footage covers 22% of the lot, with the remainder of the lot available
for access roads, pazking, landscaping, and other ancitlary uses.
; Paul Brady, Sun City Paim Desert Community Association, Oct. 2011.
`� 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.
�.
Terrs Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Annesation
Table 2
Scenario A - Vacant Acreage
Potential Potential Potential
Dwelling Square Hotel Potential
Land Use Designation Acreage Unitsl Footage2 Rooms3 Population°
Non-Developable
SP-281 Community Association
Public Utility (IID, CVWD)
Public Agency (County, State)
Riv. Co. Open Space/Water
Mirasera Open Space/Parks/Roads
Non-Developable Subtotal:
Developable
PD Medium Density Residential (4-10 du/ac)
Riv. Co. Medium-High Density Resid.(5-8 du/ac)
Mirasera High Density Residential (12 du/ac)
Mirasera Mixed Use Residential (16 du/ac)
Mirasera Very High Density Resid. (20-25 du/ac)
SP-281 Commercial
PD Community Commercial
PD Industrial — Business Park
PD Industrial — Light
Mirasera Commercial Retail
Mirasera Mixed Use Hotel
Mirasera OfficeBusiness Park
Developable Subtotal:
2,003
434
478
295
2,934
Total: 695J 2,955 1,103,361 150 6,144
1 Assumes future residential devetopment occurs at 85% of the maximum density permitted. SF = single-family dwelling unit. MF
= multi-family dwelling unit.
Z Assumes future commercial & industrial building square footage will cover 22% of the lot, with the remainder of the lot
availabte for access roads, parking, landscaping, and other ancillary uses. Hotet squaze footage estimate based on available
acreage.
� Hotel room estimate based on single hotel and available acreage.
a Based on Pa1m 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 cunently 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
271.0
18.1
5.3
10.4
39.5
344.3
113.3
30.8
22.6
10.5
66.4
3.0
10.7
28.0
26.6
17.6
3.1
18.8
351.4
963 SF
209 SF
230 SF
142 MF
1,411 MF
�
�
28,750
102,540
268,330
254,913
168,664
100,000
180,164
I50
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anneaation
2. 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 E�ibit 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 graveUconstruction faciliry, 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 SOL 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.
l2
Terra l�iova/City of Palm Desert
Fiscal Impact Analysis, Potential Annexation
The Scenario B annexation area encompasses a total of 2,988� acres. Of these, 1,987� are
developed, and ±1,001 are vacantlundeveloped. Please refer to Exhibit 4 for a land use map,
which serves as a basis for the following developed vs. vacant acreage calculations.
Land Use Designation
Inside Scenario A:
SP-281 Single-Family Residential
SP-281 Golf Course
SP-281 Commercial
SP-281 Commercial (Hotel)
Riv. Co. Commercial Retail
Riv. Co. Commercial (Hotel)
Riv. Co. Comm./Tourist (RV Park)
Riv. Co. Industrial - Light
SP-281 Fire Station
I-]0 Corridor
Railroad Corridor
Outside Scenario A:
Table 3
Scenario B - Developed Acreage
Existing Existing Existing
Dwelling Square Hotel Existing
Acreage Units' Footage2 Rooms Population3
792.0
435.3
29.0
2.2
21.1
1.4
26.3
56.6
3.5
79.2
38.8
4,985 SF
277,912
50,0004
202,205
40,0004
542,409
72
82
9,000
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
i Includes 4,869 detached and 116 attached units in Sun City, and one detached unit outside Sun City. SF = single-family
dwelling unit.
' Assumes commercial and industrial buildings cover 22% of the lot, with the remaining azea 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 additionat dwelling unit at 2.08 persons/household (2010 U.S. Census).
° 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
Terra Nova/City of Ps(m Desert
Fiscal Impact Analysis, Potential Anne�ation
Table 4
Scenario B - Vacant Acreage
Potential
Dwelling
Land Use Designation Acreage Units'
Non-Developable
Inside Scenario A:
SP-281 Community Association
Public Utility (IID, CVWD)
Public Agency (County, State)
Riv. Co. Open Space/Water
Mirasera Open Space/Parks/Roads
Outside Scenario A:
SP-225 Regional Circulation
Non-Developable Subtotal:
Developable
Inside Scenario A:
PD Medium Density Residential (4-10 dulac)
Riv. Co. Medium-High Density Resid.(5-8
dulac)
Mirasera High Density Residential (12 du/ac)
Mirasera Mited Use Residential (16 du/ac)
Mirasera Very High Density Resid. (20-25
du/ac)
SP-281 Commercial
PD Community Commercial
PD Industrial - Business Park
PD Industrial - Light
Mirasera Commercial Retail
Mirasera Mixed Use Hotel
Mirasera OfficeBusiness Park
Outside Scenario A:
PD Low Density Residential (0-4 du/ac)
SP-151 Service Commercial
SP-151 Service Commercial (Hotel)
SP-151 Business Park
SP-225 Medium-Density Residential (8 du/ac)
SP-225 Golf Course
SP-225 Commercial
SP-225 Business Park
Developable Subtotal:
271.0 --
18.1 --
5.3 --
10.4 --
39.5 --
6.4 --
350.7
113.3 963 SF
30.8 209 SF
22.6
10.5
66.4
3.0
10.7
28.0
26.6
17.6
3.1
18.8
230 SF
142 MF
1,411 MF
72.0
30.8
3.0
103.0
9.0
] 3.6
26.1
41.0
649.9
244 SF
61 SF
Potential Potential
Square Hotel
Footage2 Rooms3
28,750
102,540
268,330
254,913
168,664
100,000
180,164
�
150
295,162
200,000
987,070
250,121
392,911
250
Potential
Population4
2,003
434
478
295
2,934
507
126
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.
Z Assumes future building square footage will cover 22% of the lot, with the remainder of the lot available for access roads,
�arking, landscaping, and other ancillary uses. Hotel square footage based on 2 hotels and availaUte acreage.
Estimates based on available acreage for highway-serving hotel land uses.
� Based on Palm Desert average of 2.08 persons/household (2010 U.S. Census).
�
Terra I�Iova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anne�ation
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.'
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.z
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 lnformation, accessed October 25, 2011.
� ��1�:
3"Inland Empire Quarterly Economic Report," prepared for WRCOG by John Husing, PhD., October 201 l.
16
Terra I�Tova/City of Palm Desert
Fiscal Impact Analysis, Potential Anneaation
CITY OF PALM DESERT
POTENTIAL ANNE�:ATION
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
Terrs Novs/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
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
1% 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 Foundation.5 Properry tax revenue calculations have been
adjusted to account far 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 FinanceJCity Treasurer, City of Palm Desert, personal communication, October 27, 2011.
5 Based on property ta�: information provided by Mike Rover, Rover Armstrong, Berger Foundation representative,
personal communication, November 29, 2011.
18
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anne�ation
Table 5
Average Value of New Constraction in Palm Desert
Type of Development
Single-family Residential
Multi-family Residential
Commercial Lodging
Commercial General/Retail
Office/Professional
Industrial
Average Value
$249,123/unit'
$104,425/unit
$110/sq. ft.'` or $68,512/room3
$73/sq. ft.
$169/sq. ft.
$54/sq. ft.
Golf Course $40,431/acre4
� Source: 2"d quarter 2011 median new home value, "Inland Empire Quarterly Economic
Report," prepared for WRCOG by John Husing, Ph.D., October 3011. Includes value of land
and structure.
'` Based on building permit data provided by the Palm Desert Building & Safety Department,
Nov. 2011. Includes value of structure only.
� Based on compazable existing highway-serving hotel in the annexation area, per Riv. Co.
Assessor's records, Oct. 20ll.
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 201 l. Includes value of structure only.
Propertv 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. Properiy values are stated in year 2011 dollars. The average value of
existing residential units in Sun City is $364,653.' 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.
" Assessar'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 Anne�ation
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 Ta� 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 fscal 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.B
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:
•"Nei�hborhood 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
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anneaation
Transient Occupancv Tax
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 tl�at 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 future 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 hoteUmotel 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 201 l.
lo 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 Anne�ation
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.
Hi�hwav 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."
Measure A Funds''
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.
1� Andrea Zureick, Riverside County Transportation Commission, personal communication, November 1, 2011.
22
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anne�ation
8.75% sales tax
1
0.50% of sales tax
goes to county-wide Measure A Fund
�
24% of county-wide Measure A Fund
goes to Coachella Valley region
�
35% of Coachella Valley portion
goes to local streets and roads
�
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-specifc and unknown at this time.
The second revenue component of the Fire Fund is the Structural Fire Tax. For land not in a
redevelopment axea (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.
ta :�Comprehensive Annual Financial Report," City of Palm Desert Finance Department, June 30, 2010, page 186.
23
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Fiscal Impact Analysis, Potential Anneaation
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 Housin� Miti�ation 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 Miti�ation 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 Pro�ram 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, Potentiai Annesation
Traffic Si�nals Fund
Revenues to this fund are collected for residential, commercial and industrial developments
either at the time grading permits are paid ar 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.ls
Planned Draina�e 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."
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.' 8 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.
ls Palm Desert Department of Public Works.
16 Ibid.
�� Ibid.
18 Lauri Aylaian, Community Development Director, City of Palm Desert, personal communication, October 26,
201 l .
25
Terra Nova/City of Palm Desert
Fiscai Impact Analysis, Potential Annea�ation
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
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
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 I-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, eyuipment 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.
Far 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 Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
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
fscal 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 Roadwav 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 below20. These costs are paid through the General Fund, and
include funds from a reserve fund maintained by the Public Works Department for such projects.
�0 City of Palm Desert Budget calculations f7r roadway construction and maintenance calculations, January, 2012.
28
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anneaation
Table 9
Annual Road Maintenance Costs,
2002-2011
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2001
10 Year Average
Costs
$1,610,521
$9,026,890
$3,587,830
$10,216,200 �
$4,220,000 �
$6,236,627 �
$10,437,052 �
$7,558,700 �
$5,257,500 �
$2,764,936 �
$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, 38th
Avenue, 40`h 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 far 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 syuare 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.
�1 "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 Anne�ation
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 roadwa.ys. 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 eyuipped, 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.'3 However, no construction date has
been set; construction is expected to occur several years in the future.
2� Dorian Cooley, Division Chief, CALFIRE/Riverside County Fire, communication, November 14, 2011.
�3 Ibid.
30
Terra 1Vova/City of Palm Desert
Fiscal Impact Analysis, Potential Annelation
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.'4 This equates to
an average of 74 incidents per year. Fire Department data gathered for the I-10 carridor 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.'6
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
iirefghter 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.
z5 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 Anneaation
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 NovalCity of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
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 E�ibit 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 ar 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 of230 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 Anneaation
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 fve-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 4`h 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.'' 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 Annelation
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 syuare 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 Anneaation
• 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, far a total of 1,828,475 square feet at
build out.
• Average value of $169 per square foot, based on recent new ofiice/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 syuare 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 Anne�ation
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 costhevenue 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 ll 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 Anne�ation
Table 10
Total Potential Costs/Revenues Summary Table
Annexation Scenario A
Build out Phase
Phase I
(Yrs 1-5)
IANNUAL REVENUES
General Fund:
IProperty Tax
IProperty Transfer Tax
ISales Ta�c
ITransient Occupancy Tax
IMotor Vehicle In-Lieu Fees
ITotal Annual General Fund Revenue at Phase Build out:
IRestricted Funds:
IHighway Users Gas Tax
IMeasure A Funds
II Prop. A Fire Tax
IStructural Fire Tax
ITotal Annual Restricted Fund Revenue at Phase Build out:
IInterest Earnings:
ITotal Annual Revenues at Phase Build out:
IHistoric Average Interest Rate, 90-day Treasury Bill:
IAnticipated Interest on Revenues:
�' Total Annual Revenues with Interest at Phase Build out: I
ANNUAL COSTS
General Fund:
General Govemment
Police Protection
Roadway Maintenance
Total Annual General Fund Costs at Phase Build out:
Restricted Funtls:
Fire Protection
Ambulance Services
Total Annual Restricted Fund Costs at Phase Build out:
Tota/s:
$836,415
$112,171
$1,874,090
$544,596
$38,761
$3,406,032
$282,195
$15,742
$386,607
$1,402,787
52,087,331
$5,493,362
4.39%
$24],159
$5,734,521
$3,413,867
$4,137,575
$488,478
$8,039,920
$1,500,000
$940,944'0
$2,440,944'b
� Total Annual Costs at Phase Build out: $10,480,864
IPro,jected Annual Cashflow at Phase Build out: -$4,746,343
3o Does not include one-time (year 1) start-up ambulance costs of $190,000.
Phase II
(Yrs 6-10)
$947,279 I
$125,579 I
$2,314,298 I
$776,804
$48,632
$4,212,592
$354,059
$19,440
$467,813
$1,588,723
$2,430,03.5
$6,642,628
4.39%
$291,611
56,934,239
$4,295,120
$5,251,483
$574,680
$10,121,283
$1,500,000
$940,944Z6
$2,440,944�
$12,562,227
-$5,627,988
38
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
Table 11
Developer Impact Fee Revenues (One Time Only)'
Annexation Scenario A
Build out Phase
New Construction Tax
Art in Public Places Fund
Low Income Housing Mitigation Fee
Child Care Program Fund
Traffic Signals Fund
Planned Drainage Fund
Parks & Recreation Facilities Fund
Total Developer Impact Fee Revenues at Phase Build out:
`Developer impact fees occur only once, at the time the unit is permitted.
Phase I
(Yrs 1-5)
$1,107,172
$963,967
$350,661
$491,268
$180,514
$175,700
$1,823,916
$5,093,198
Phase II
(Yrs 6-10)
$1,107,172 �
$963,967 �
$350,661 �
$491,268 �
$180,514 �
$175,700 �
$1,823,916 �
$5,093,198 �
39
Terrs Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anneaation
Table 12
Total Potential Costs/Revenues Summary Table
Annexation Scenario B
IANNUAL REVENUES
General Fund:
IProperty Tax
IProperty Transfer Tax
ISales Tax
ITransient Occupancy Tax
IMotor Vehicle In-Lieu Revenue
ITotal Annual General Fund Revenue at Phase Build out:
IRestricted Funds:
IHighway Users Gas TaY
IMeasure A Funds
IProp. A Fire Ta�c
IStructural Fire Tax
ITotal Annual Restricted Fund Revenue at Phase Build out:
IInterest Earnings:
� Total Annual Revenues at Phase Build out:
IHistoric Average Interest Rate, 90-day Treasury Bill:
IAnticipated Interest on Revenues:
ITotal Annual Revenues with Interest at Phase Build out:
IANNUAL COSTS
General Fund:
IGeneral Government
IPolice Frotection
IRoadway Maintenance
ITotal Annual Generai Fund Costs at Phase Build out:
IRestricted Funds:
IFire Protection
IAmbulance Services
I Total Annual Restricted Fund Costs at Phase Build out:
� Totals:
Build out Phase
Phase I Phase II Phase III
(Yrs 1-5) (Yrs 6-10) (Yrs 11-15)
$828,082 $915,621
$96,687 $97,980
$2,078,761 $2,698,991
$621,998 $931,610
$34,343 $39,789
$3,659,871 $4,683,990
$250,028
$17,642
$351,356
$1,390,562
$2,009,408
$289,679
$22,672
$395,453
$1,537,377
$2,245,180
$5,669,279
4.39%
$248,881
$6,929,171
4.39%
$304,191
$5,918,160 $7,233,361
$3,031,673 $3,517,392
$3,701,198 $4,313,21'7
$607,245 $678,122
$7,340,116 $8,508,731
$1,528,907
$940,94431
$2,469,851Z'
$1,557,408
$940,94427
$2,498,35227
I Total Annual Costs at Phase Build out: I $9,809,967 I$11,007,084
� Pro,iected Annual Cashflow at Phase Build out: i -$3,891,807 j -$3,773,723
31 Does not include one-time (year 1) start-up ambulance costs of $190,000.
Phase IV
(Yrs 16-20)
$1,003,160 $1,09Q698 I
$99,274 $100,568 I
$3,319,220 $3,939,446 I
$1,241,221 $1,550,832 I
$45,235 $50,682
$5,708,110 $6,732,226
$329,330 $368,981
$27,881 $33,091
$439,549 $483,645
$1,684,193 $1,831,008
$2,480,952 $2,716,725
$8,189,062 ( $9,448,950
4.39% 4.39%
$359,500 I $414,809
$8,548,562 j $9,863,759
$4,003,112 $4,488,831
$4,925,236 $5,537,254
$749,002 $819,879 I
59,677,349 $10,845,965 I
1
$1,585,910 $1,614,411 I
$940,94427 $940,94427 I
$2,526,85427 $2,555,35527 I
1
$12,204,203 � $13,401,320 I
-53,655,641 � -$3,537,560 �
40
Terra Novs/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
Table 13
Developer Impact Fee Revenues (One time only)'
Annexation Scenario B
New Construction Tax
Art in Public Places Fund
Low Income Housing Mitigation Fee
Child Care Program Fund
Traffic Signals Fund
Planned Drainage Fund
Parks & Recreation Facilities Fund
Total Developer Impact Fee Revenues
at Phase Build out: $4,356,004 $4,356,004
' Developer impact fees occur only once, at the time the unit is permitted.
Build out Phase
Phase I Phase II Phase III
(Yrs 1-5) (Yrs 6-10) (Yrs 11-15)
$811,863 $811,863 $811,863
$787,633 $787,633 $787,633
$522,899 $522,899 $522,899
$803,567 $803,567 $803,567
$187,230 $187,230 $187,230
$162,475 $162,475 $162,475 �
$1,080,338 $1,080,338 � $1,080,338 �
Phase IV
(Yrs 16-20)
$811,863
$787,633
$522,899
$803,567
$187,230
$162,475
$1,080,338
$4,356,004 � $4,356,004
41
Terra Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anneaation
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 T� ($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.
«3
Terra Nova/City of Pslm Desert
Fiscal Impact Analysis, Potential Anneaation
Appendix A
Scenario A
Detailed Cost and Revenue Tables
44
TN PD Potential Annexation Fiscal Anal}�sis
City of Palm Desert
Scenario A: Prc�p. Tar, Strua Fre Taz
Property Tax Revenue - Scenario A
�FY�om Existing Conditions
Existing Conditions (developed parcels are taxed on value of land &
structure; vacant narcels are taxed on value of land)
�Calculation of Property Tax Revenue
ITotal Value of ail parcels'
I(subtract) Value of tax exempt parcelsZ
ITotal value of taxable parcels
Buildout Phase
Phase I Phase II
(Yrs.l-5) (Yrs.6-10)
$2,087,295,429 $2,087,295,429�
$7,112,668 $7,112,668�
$2,080,182,761 $2,080,182,761 I
�Property Tax Rate 1% 1%
ITotal Property Tax Collected by County at phase buildout $20,801,828 $20,801,828
IPercent of Property Taac Allocated to City's General Fund 7.0%� 7.O�lo
Total Amount Allocated to City General Fund at phase buildout (prior
to ERA� $1,456,128 $1,456,128
IPercentage deducted for ERAF Contributions 3.5% 3.5%
ITotal Amount Allocated to City General Fund at phase buildout $728,064 $728,064
ICalculation of Structural Fire Tax Revenue
I Structural Fire Tas Rate 5.87% 5.87%�
IProperiy TaY Revenue collected by County $20,801,828 $20,801,828
ITotal Structural Fire Tax Revenue at phase buildout $1,221,067 $1,221,067
' From Riverside Coun[}' Assessors records, Oct. 2011. Includes ��alue of land for vacant parcels, and value of land and stnictures for deveioped
parcels.
Z Ta� ezempt parcels, as flagged in Riverside County Assessors records, Oct. 2011. Includes 13551 acres of land, primaril}' owned b}' CV WD,
CA DOT, Counh of Ricerside, and Sun Cit}' Palm Desert Community Association.
From Future Residential Development
Land Use Designation: Riv. Co. Medium High Density Residential (S-
8 du/ac)
Total No. Acres: 30.8
No. of Potential Bui[dout Units: 209'
INumber of acres developed during phase
Maximum density pennitted (units/acre)
Maximum potential units constructed during this phase
Number of total potential units constructed at buildnut
IAverage value per unit�
ITotal Value
IProperty Taac Rate
�Tn[al Properry Tas Collected by County at Phase Buildout
IPercent of Proper[y Tax Allocated to City's General Fund
Total AmountAliocated to City General Fund at phase buildout (prior
to ERAF)
Buildout Phase
Phase 1
(Yrs. l-5)
15.4
8.0
105
105
$249,123
$26,088,161
1 �li, I
$260,882I
7.0%I
$18,262 �
Phase II
(Yrs. 6-10)
15.4
8.0
105
209
$249,123
$_52,176 321
1 �/,
$521,763
7.0�/0
$36,523
�Percen[age deducted for ERAF Contributions 3.5%I 3.5°l0
ITotal AmountAllocated to City General Fund at phase buildout $9,131) $18,262
ICalculation of Structural Fire Tax Revenue
IStructural Fre Tax Rate 5.87%� 5.87%
IProperty Tax Revenue collected by County $260,882 $521,763
ITotal Structura( Fre Tax Revenue at phase buildout $15,314 $30,627
'Assumes land a ill he dece(opecl at 85%o of the ma�imum densi[}' pertnitted.
'"Inland Empire QuaRedy &:onomic Report," prepared for WRCOG by John Husing, Ph.D., October 2011. Accounts for �alue of' land and
SL1'UCWI'C.
Page 1 of 48
TN PD Potential Annesation Fiscal Anal}'sis
City of Palm Desert
Scenario A: Pmp. Ta�. Struc. Fire Ta�
From Future Residential Development
Buildout Phase
Land Use Designation: PD Medium Density Residential (4-IO du/ac)
Total No. Acres: 113.3
No. of Potential Buildout Units: 963'
INumber of acres developed during phase
IMaximum density permitted (units/acre)
IMaximum potential units constructed during this phase
INumber of total potential units constructed at buildout
IAverage value per unit2
ITotal Value
IProperty Tax Rate
Total Property Tas Collected by County at Phase Buildout
Percent of Property Tax Allocated to City's General Fund
Phase 1
(Yrs. 1-5)
56.7
10.0
482
482
$249,123
$119,958,953
1%
$1,199,590
7.0%
Phase II
(Yrs. 6-10)
56.7 �
I O.OI
�Fi2l
963I
$249,123I
$239,917,905I
1%I
$2 399,179I
7.0% I
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%I
�Total Amount Allocated to City General Fund at phase buildout $41,986 $83,971 I
�Calculation of Structural Fire Tax Revenue I
IStructural Fire Tax Rate 5.87% 5.87%I
�Property Tax Revenue collected by County $1,199590 $2 399,179I
�Total Structural Fre Tax Revenue at phase buildout $70,416 $140,832I
'Assumes land �cill be developed a[ 8�°h, of the ma�imum density permi[ted.
Z"Inland Empire Quarterl}' Economic Report," prepared for WRCOG b}' John Husing, Ph.D., October 2011. Accounts for value of land and
structure.
From Future Residential Development
Buildout Phase
Phase I
(Yrs. l-5)
Phase II
(Yrs. 6-10)
Land Use Designation: Mirasera High Density Residential (12 du/ac)
Toial No. Acres: 22.6
No. of Potenti¢l Buildout Units: 230`
Number of acres developed during phase
Maximum density permitted (units/acre)
M�imum potential units constructed during this phase
INumber of total potential units constructed at buildout
Average value per unit�
Total Value
Property Tax Rate
Total Property Ta�c Collected by County at Phase Buildout
IPercent of Proper[y Ta�c Allocated to City's General Fund
-'..� .................. ... �..� ............ . ...... ». 1,.....,.. .,.......,... �r...,.
to F,RAF)
113
12.0
115
115
$249,123
$28>713,917
I °k,
$287,139
'7.0%
$20,100
1i.3
12.0
115
231
$249,123I
$57,427,834I
I°k,l
$574,278I
7.0%I
$40,199I
�Percentage deducted for ERAF Contributions 3.S�lo 3.S�Io�
Total Amount Allocated to City General Fund at phase buildout $10,050 $20,1001
Calculation of Structural Fire Tax Revenue I
Structural Fire Tax Rate 5.87°k 5.87%��
Properry Tax Revenue collected by County $287,139 $574,278I
Total Structural Fre Tax Revenue at phase buildout $16,855 $33,710I
'Assumes land �vill be developed a[ 8�%n of [he macimum densit}' peani[[ed.
'"Inland Fanpire Quartedy Economic Report," prepared for WRCOG by John Husing, Ph.D., October 2011. Accamts for value of land and
swcture.
Page 2 of 48
TN PD Poten[ial Annexation Fiscal Anal}'sis
City of Palm Desert
ScenarioA: Pmp. Tac, Struc. Fire Taz
From Future Residential Development
Buildout Phase
Land Use Designaiion: Mirasera Mixed Use Residential (16 du/ac)
Total No. Acres: 10.5 Phase I Phase II
No. of Potential Buildout Units: I42' (Yrs. 1-5) (Yrs. 6-10)
INumber of acres developed during phase 5.3 53
IMaximum density pernutted (units/acre) 16.0 16.0
IM�imum potential units constructed during this phase 71 71
INumber of total potential units constructed at buildout 71 143
Average value per unit2 $104,425 $104,425�
Total Value $7,455,945 $14,911,890
Property Tax Rate 1�l0 1%
ITotal Property TaJc Collected by County at Phase Buildout $74,559 $149,ll9
IPercent of Property Tax Allocated to City's General Fund 7.0% 7.0%I
ITotal Amount Allocated to City General Fund at phase buildout (prior I
to ERAF) $5,219 $10,438
�Percentage deducted for ERAF Contributions 3.5°l0 3.5%I
ITotal Amount Allocated to City General Fund at phase buildout $2,610 $5,219I
ICalculation of Structural Fire Tax Revenue I
I Structural Fire Tax Rate 5.87% 5.87%
IProperty T� Revenue collected by Counry $74,559 $149,119
ITotal Structural Fire Tax Revenue at phase buildout $4377 $8,753
'Assumes land e•ill be developed at 8�% of the maeimum density pennitted.
2 Based on building pertni[ data pm�•ided by the Palm Desert Building and Safet}' Depl, Nov. 201 ]. Indudes � alue of struc[ure onlp.
From Future Residential Development
Land Use Designation: Mirasera Very High Density Residential (20- Buildout Phase
25 du/ac)
Total No. Acres: 66.4 Phase I Phase II
No. of Poteretial Buildout Units: 1,411` (Yrs. l-5) (Yrs. 6-10)
INumber of acres developed during phase 33.2 33.2
IMaximum density pemutted (units/acre) 25.0 25.0
IMaximum potential units constructed during this phase 706 706
INumber of total potential units constructed at buildout 706 1,411
IAverage value per unit= $1(�,425 $1(�,425
ITotal Value $73,671,838 $147.343,675
I Property T� Rate 1°k, 1%�
ITotal Properry Tax Collected by County at Phase Buildout $736,718 $1,473,437
Percent of F'roperty Tax Allocated to City's General Fund 7.0% 7.0%�
_.,.».. "'-.,..... f _......_..,.. ... .,..� ............ � ».... », r ........ .............. �Y...,.
to ERAF) $51,570 $103,141
IPercentage deducted for ERAF Contributions 3.5% 3.5°l0
�Total Amount Allocated to City General Fuiid at phase buildout $25,785 $51 570
ICalculation of Structurat Fire Tax Revenue
� Structural Fire Tax Rate 5.87°k� 5.87°k,
IF'roperty Taac Revenue collected by County $736,718 $1,473,437
ITotal Structural Fre Tax Revenue at phase buildout $43,245 $86,491
'Assumes land will be de��eloped a[ E35% of the maximum density permitted.
' Based on huilding pern�it data provided by the Palm Desert BuiWing and Safety Ikpt., Noc. 2011. Indudes value of stmcture onl}.
Page 3 of 48
TN PD Potential Annesation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. Tac, Struc. Fire Tas
From Future Commercial Development
Land Use Designation: Commercial
Total No. Acres: 31.3
No. of Potential Buildout Sq. Ft.: 299,954`
INumber of acres developed during phase
IPercentage of lot covered by structure'
ISquare footage constructed during this phase
ISquare footage constructed at phase buildout
Buiidout Phase
Phase I Phase II
(Yrs.l-5) (Yrs.6-10)
15.7 15.7
22%
149,977
149,977
22°k�
149,977
299,954
�Average value per square footZ $73 $73
ITotal Value $10,948,327 $21,896,654
IProperty Tax Rate 1%I 1%
ITotal Property Tax Collected by County at Phase Buildout I $109,483I $218,967I
IPercent of Property Tax Allocated to City's General Fund I 7°k, 7%I
ITotal Amount Allocated to City General Fund at phase buildout (prior I I
to ERA� $7,664 $15,328
IPercentage deducted for ERAF Contributions I 3.5%I 3.5%I
ITotal Amount Allocated to City General Fund at phase buildout I $3,832I $7,664I
ICalculation of Structural Fire Tax Revenue
IStructural Fire Tax Rate 5.87% _5.87%
IProperty Tax Revenue collected by County $109,483 $218,967
ITotal Structural Fire Tax Revenue at phase buildout $6,427 $12,853
'Assumes structure rvill 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
I.and Use Designation: Commercial (Hotel)
Total No. Acres: 3.1
No. of Potential Buildout Sq. Ft.: 100,000'
No. of Potential Room: I50
�No. of rooms constructed at phase buildout
�Average value per roomZ
�Total Value
�Property Tax Rate
�Total Property Tax Collected by County at Phase Buildout
�Percent of Property Ta�c Allocated to City's General Fund
�to ERA� � $3 597�
�Percentage deducted for ERAF Contributions � 3,5°k,�
�Total AmountAllocated to City General Fund at phase buildout � $1,798�
�Calculation of Stractural Fire Tax Revenue
�Structural Fire Tax Rate 5.87%
�Property Tax Revenue collected by Counry $51 384
�Total Structural Fire Tax Revenue at phase buildout $3,016
' Tena Nova estimate trdsed on single hotel and a� ailable acreage.
Z Based on comEwraWe existing highwa�-sen ing hotel in the annesation area, per Ri�•. Co. Assessor's records, Oct 2011.
Buildout Phase
Phase II
(Yrs. 6-10)
150
$68 512
$10,276,800
1 °k�
$102,768
7%,
$7,] 94
3 5%
$3,597
Phase I
(Yrs. 1-5)
75
$68,512
$5>138,400
1%�
$51,384�
7°k, �
5.87%
$102,768
$6,032
Page 4 of 48
TN PD Poten[ial Annesation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. Tar, Strua Fre Tax
From Future Business Park Developme�t
Land Use Desigrtation: Business Park
Total No. Acres: 46.8
No. of Potential Buildout Sq. Ft.: 448,494'
�Number of acres developed during phase
�Percentage of lot covered by structure'
�Square footage constructed during this phase
� Square footage constructed at phase bui(dout
�Average value per square foot'-
�Total Value
� Property Tax Rate
(Total Property Tax Collected by County at Phase Buildout
�Percent of Property TaY Allocated to City's General Fund
�to ERAF)
�Percentage deducted for ERAF Contributions
�Total Amount Allocated to City General Fund at phase buildout
Phase I
(Yrs. l-5)
23.4
22%a
224,247
224,247
$169
$37>897,723
1%
$378,977
7%
$26,528
3.5%
$13,264
Phase II
(Yrs. 6-10)
23.4�
22%�
224,247
448,494
$169
$75,795,445
1%�
$757,954�
7%
$53,057
3.5%
$26,528
Buildout Phase
�Calculation of Structural Fire Tax Revenue
� Structural Fire Tax Rate 5.87% _5.87%
�Property Tax Revenue collected by County $378,977 $757,954�
�Total Structural Fire Tax Revenue at phase buildout $22,246 $44,492�
`Assumes struc[ure will account for 22% lot coverage. Remainder of lo[ ���ill include access roads, parking facilities, landscaping, and other
' Based on compilation of building permit data provided by Palm Desert Building & Safet}' Department, October 2011.
From Future Industrial Development
Land Use Designation: Industrial Buildout Phase �
Total No. Acres: 26.6 Phase I Phase II
No. of Pote►atial Buildout Sq. Ft.: 254,913' (Yrs. 1-5) (Yrs. 6-10)
�Number of acres developed during phase 13.3 133 �
�Percentage of lot covered by structure' 22% 22�10�
�Square footage constructed during this phase 127,457 127,457 �
� Syuare 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%I
�Total Properry Tax Collected by County at Phase Buildout $68,827 $137,653
�Percent of Property Tax Allocated to City's General Fund 7°k, 7�k� �
�to ERAF) - - - $4,818 $9,636�
�Percentage deducted for ERAF Contributions 3.5% 3.5%,�
�Total Amount Allocated to City General Fund at phase buildout $2,4U9 $4,818�
�Calculation of Structural Fire Tax Revenue �
� Structural Fire T� Rate 5.87�� 5.87'� �
�Property Tax Revenue collected by County $68,827 $137,653�
�Total Structural Fre Tax Revenue at phase buildout $4,040 $8,080�
'Assumes stn�c[ure will account for 22�, lot co� erage. Remainder of' lot will include access roads, parking facilities, landscaping, and other
= Based on compilation of building permit data provided by Palm Desert Building & Safet� Department, October 2011.
Page 5 of 48
TN PD Potential Anne�ation Fiscal Analysis
Property Tax Revenue Summary Table
City of Palm Desert
ScenarioA: Prop. Tar, Struc. Fire Tax
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
Total property tax revenue to City General Fund at phase buildout from
existing development $728,064
�.....from future Riv. Co. Medium High Densiry residentia( development $9,131
I.....from future PD Medium Density residential devetopment $41,986
�.....from future Mirasera High Density residential development $10,050
�.....from future Mirasera Mixed LJse residential development $2,610
�.....from future Mirasera Very High Density residential development $25,785
�.....from future commercial development $3,832
�....Srom future hotel development $1,798
�.....from future business park development $13,264
�.....from future industrial-light development $2,409
� Subtotal $838,929
IAdjustment for loss of property tax revenue on vacant Single-Famil; � parcels after development occurs
IValue of land on currenfly vacant (but developable) Single-Family
Residential parcels' $14,365 301
City's Property Tax revenue on value of land for currently vacant (but
developable) Single-Family residential parcels' $5,028
(subtract) Property Tax Revenue Loss from line above, phased over
entire buildout timeframe
Total Property Tax Revenue at Phase Buildout
$2,514
$836,415
$728,064
$18,262�
$83,971 I
$20,100 �
$5,219 �
$51,570 �
$7,664�
$3,597 �
$26,528 �
$4,818 �
$949,793�
$14365,301
$5,028I
$2,514
$947,279I
' Refers to pa�+cels that are currently cacant, but developable in [he future for single-famil}� residential development. HYisting Conditions [able
includes propeRy tar re�•enue cutten[ly generated b}' these parcels on their land value. Future De��elopment tables projects future property tas
revenue genera[ed by these parcels on their land vatue and sWc[ure calue. To avoid double-counUng property tax revenue from land value, the
wrrent land value of [hese parcels is subtrac[ed here.
Page 6 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Pmp. Transfer Tax
Property T�ansfer Tax Revenue - Scenario A
IFrom Existing Residential Development
Existing Single-Family Residential Units
No. of Acres: 792
No. of Dwelling Urzits: 4,985
IExisting Units(80% of market value is subject to tax)
� Number of units existing in lst year of this phase
� Number of existing units changing ownership in lst year of this phase
� Number of units existing in 2nd year of this phase
� Number of existing units changing ownership in 2nd year of this phase
� Number of units existing in 3rd year of this phase
Number of existing units changing ownership in 3rd year of this phase
Number of units existing in 4th year of this phase
Number of existing units changing ownership in 4th year of this phase
Number of units existing in Sth year of this phase
� Number of existing units changing ownership in Sth year of this phase
� Total number of units existing during this phase
� Total number of existing units changing ownership during this phase
Property Value per dwellin� unit'
Unencumbered Value per unit (80% of value)
IAmount subject to Property Transfer Tax for all
existing units changing ownership during this phase
� Property Transfer Tax Rate
� Total Property Transfer Tax Collected at Phase Buildout
� Percent of Property Transfer Tax allocated to Palm Desert
ITotal Property Transfer Ta�c Allocated to Palm Desert General Fund at phase
buildout (for 5-year period)
INumber of years this phase ( to get annual average)
ITotal Annual Property Transfer Tax Allocated to Palm Desert at Phase Buildout
Buildout Phase
Phase I
(Yrs.l-5)
Phase II
(Yrs. 6-10)
4985
499
4985
499
4985
499
4985
499
4985
499
4985
2493
$364,653
$291,722
$727,118,082
0.11%�
$799,830�
50%�
$399,915I
SI
$79,983I
' Average value of residential units in Sun City, based on Riverside Counry Assessors data, includes value of land and structure.
4985
499
4985
499�
4985�
499�4985
499�
4985�
499
4985
2493
$364,653
$291,722
$727,118,082
0.11%I
$799,830
50%
$399,915
$79,983
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 Medium Density Residential (4-10 duJac)
No. of acres: 113.3
No. of potential buildout units: 963'
(New Units (100% of market value is subject to tax)
� Number of acres developed during phase
� Ma�cimum Density permitted (units/acre)
� Number of new units durinQ this phase'
� Market Value per unit
� Amount Subject to Property Transfer Tax for all new units sold
�Existing Units(80°l0 of market value is subject to tax)
� Number of units constructed in 1 st year of this phase
� Number of existing units changing ownership in lst year of this phase
� Number of units constructed by end of 2nd year of this phase
� Number of existing units changing ownership in 2nd year of this phase
� Number of units constructed by end of 3rd year of this phase
� Number of existing units changing ownership in 3rd year of this phase
� Number of units constructed by end of 4th year of this phase
� Number of existing units changing ownership in 4th year of this phase
� Number of units constructed by end of Sth year of this phase
� Number of existing units changing ownership in 5th year of this phase
� Total number of existing units changing ownership during this phase
� Market Value per unit
� Unencumbered Value per unit (80% of market value)
I �Y.vwu ouv�...,� w.,v�.,i �y •�auoi�.i ian ivi ai�
;ot;.,rt „n,r� r.l,�.,rt;r,rt r, ,-�h;., .1,�«;,.rt tl,;� ..i,��a
New Units & Existing Units Combined
ITotal amount subject to Property Transfer Tax (includes all new units
sold & all existing units changing ownership)
� Property Transfer Tax Rate
� Total Property Transfer Ta�c Collected at Phase Buildout
� Percent of Property Transfer Tax allocated to Palm Desert General Fund
Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5-
year period)
�Number of years this phase (to get annual average)
�Total annual Property Transfer Tax allocated to Palm Desert at phase buildout
Buildout Phase
Phase I
(Yrs.l-5)
56.7
10
482
$249,123
$119,958,953
Phase II
(Yrs. 6-10)
56.7
10
482
$249,123
$119,958,953
96I�
192
�
288
�
384
38
482
48
87�
$249,123�
$199,298�
$17,249.775 �
$137,208,727
0.11%
$150,930
50%
$75,465
$15,093
578�
58�
674
67
770
77
866�
87�
849
85
374
$249,123
$199,298�
$74,439.945 �
$194,398,898
0.11%
$213,839
50%
$106,919
5
$21,384
Page 8 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. Transfer Tax
From Future Residentiai Development
Land Use Designation: Medium-High Density Residential (S-8 du/ac)
No. of acres: 30.8
No. of potential buildout units: 209'
�New Units (100°Io of market value is sub,ject to tax)
� Number of acres developed during phase
� Maximum Density permitted (units/acre)
� Number of new units during this phase'
� Market Value per unit
� Amount Subject to Property Transfer Ta�c for all new units sold
�Existing Units(80% of market value is subject to tax)
� Number of units constructed in lst year of this phase
� Number of existing units changing ownership in lst year of this phase
� Number of units constructed by end of 2nd year of this phase
� Number of existing units changing ownership in 2nd year of this phase
I- Number of units constructed by end of 3rd year of this phase
I Number of existing units changing ownership in 3rd year of this phase
� Number of units constructed by end of 4th year of this phase
INumber of existing units changing ownership in 4th year of this phase
� Number of units constructed by end of Sth year of this phase
Number of existing units changing ownership in Sth year of this phase
Total number of existing units changing ownership during this phase
Market Value per unit
Unencumbered Value per unit (80% of market value)
IAmount subject to Property Transfer Tax for all
existing units changing ownership during this phase
�New Units & Existing Units Combined
�Total amount subject to Property Transfer Tax (includes all new units
sold & all exisring units changing ownership)
Property Transfer Tax Rate
Total Properry Transfer Tax Collected at Phase Buildout
Percent of Property Transfer Ta�c allocated to Palm Desert General Fund
Total Property Transfer TaY Allocated to Palm Desert at phase buildout (for 5-
year period)
INumber of years this phase (to get annual average)
ITotal Annual Property Transfer Tax allocated to Palm Desert at phase buildout
Buildout Phase
Phase I Phase II
(Yrs.l-5) (Yrs.6-10)
15.4
105
$249,123
$26,088,161
15.4�
8
105
$249,123
$26,088,161
20
�
40
�
60
�
80
105�
10�
18�
$249,123
$199,298
$3 ,681,440
$29,769,601
0.11%
$32>747
50%
$16,373
5
$3,275
125
12
145
14
165
16
185
18
184
18
80
$249,123
$199,298
$16,001,270
$42,089,430
0.11%
$46,298
50%
$23,149
5
$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 du/ac)
No, of acres: 22.6
No. of potential buildout units: 230'
INew Units (100% of market value is subject to tax)
I Number of acres developed during phase
Maximum Density permitted (units/acre)
Number of new units during this phase'
Market Value per unit
Amount Subject to Property Transfer Tax for all new units sold
Existing Units(80% of market value is subject to tax)
I Number of units constructed in lst year of this phase
INumber of existing units changing ownership in lst year of this phase
INumber of units constructed by end of 2nd year of this phase
INumber of existing units changing ownership in 2nd year of this phase
I Number of units constructed by end of 3rd year of this phase
INumber of existing units changing ownership in 3rd year of this phase
INumber of units constructed by end of 4th year of this phase
INumber of existing units changing ownership in 4th year of this phase
I Number of units constructed by end of Sth year of this phase
INumber of existing units changing ownership in Sth year of this phase
I Total number of existing units changing ownership during this phase
I Market Value per unit
� Unencumbered Value per unit (80% of market value)
IAmount subject to Property Transfer Tax for all
existing units changing ownership during this phase
New Units & Existing Units Combined
Total amount subject to Property Transfer Tax (inciudes all new units
sold & all existing units changing ownership)
I Property Transfer Tax Rate
ITotal Property Transfer Tax Collected at Phase Buildout
� Percent of Property Transfer Ta�c allocated to Palm Desert General Fund
Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5-
year period)
Number of years this phase ( to get annual average)
Total Annual Property Transfer Tax allocated to Palm Desert at phase buildout
Buildout Phase
Phase I
(Yrs.l-5)
11.3
12
115
$249,123
$28,713,917�
23
�
46
�
69
0
92
9
115
12
21
$249,123
$199,298
$4,130,659
$32,844576
0.11%
$36,129
50%
$18,065
5
$3,613
Phase II
(Yrs. 6-10)
11.3
12
115
$249,123
$28,713,917
138
14
161
16
184
18
207
21
203
20
89
$249,123
$199,298
$17,818,074
$46,531,991
0.11 %
$5 ] ,185
50%
$25,593
S
$5,119
Page 10 of 48
TN PD Potential Annexation Fiscal Analysis
Ciry of Palm Desert
Scenario A: Pmp. Transfer Tax
IFrom Future Residential Develo�ment
Land Use Designation: Mirasera Mixed Use Residential (16 du✓ac)
No. of acres: lOS
No. of potential buildout units: 142'
New Units (100% of market value is subject to tax)
Number of acres developed during phase
Maximum Density permitted (units/acre)
Number of new units during this phase'
Market Value per unit
Amount Subject to Property Transfer Tax for all new units sold
Existing Units(80% of market value is subject to tax)
Number of units constructed in 1 st year of this phase
Number of existing units changing ownership in lst year of this phase
Number of units constructed by end of 2nd year of this phase
Number of existing units changing ownership in 2nd year of this phase
Number of units constructed by end of 3rd year of this phase
Number of existing units changing ownership in 3rd year of this phase
Number of units constructed by end of 4th year of this phase
Number of existing units changing ownership in 4th year of this phase
Number of units constructed by end of Sth year of this phase
Number of existing units changing ownership in Sth year of this phase
Total number of existing units changing ownership during this phase
� Market Value per unit
IUnencumbered Value per unit (80% of market value)
IAmount subject to Property Transfer Tax for all
existing units changing ownership during this phase
�New Units & Existing Units Combined
(Total amount subject to Property Transfer Tax (includes all new units
sold & all existing units changing ownership)
IProperty Transfer T� Rate
I Total Property Transfer T� Collected at Phase Buildout
I Percent of Property Transfer T� allocated to Palm Desert General Fund
Total Property Transfer T� Allocated to Palm Desert at phase buildout (for 5-
year period)
(Number of years this phase (to get annual average)
(Total Annual Property Transfer T� allocated to Palm Desert at phase buildout
Buildout Phase
Phase I
(Yrs.l-5)
5.3
16
71
$104,425
$7,455,945
Phase II
(Yrs. 6-10)
5.3
16
71
$104,425
$7,455.945
14
�
28
�
42
�
56
6
71
7
13
$104,425
$83,540
$1,064,300
$8 520,245
0.11%
$9,372
50%
$4,686
5
$937
85
9
99
10
113
11
127
13
126
13
55
$104,425
$83,540
$4,608,066
$12,064,011
O.l l%
$13>270
50%
$6,635
5
$1,327
Page 11 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. Transfer Tax
�From Future Residentiat Development
Land Use Designation: Mirasera Very High Density Residential (20-25 du/ac)
No. of acres: 66.4
No. of potential buildout units: 1,411'
New Units (100% of market value is subject to tax)
INumber of acres developed during phase
IMaximum Density permitted (units/acre)
�Number of new units during this phase'
Market Value per unit
� Amount Subject to Property Transfer Tax for all new units sold
�Existing Units(80% of market value is subject to tax)
INumber of units constructed in lst year of this phase
I Number of existing units changing ownership in lst year of this phase
I Number of units constructed by end of 2nd year of this phase
I Number of existing units changing ownership in 2nd year of this phase
INumber of units constr�cted by end of 3rd year of this phase
� Number of existing units changing ownership in 3rd year of this phase
INumber of units constructed by end of 4th year of this phase
I Number of existing units changing o�vnership in 4th year of this phase
INumber of units constructed by end of Sth year of this phase
I Number of existing units changing ownership in Sth year of this phase
I Total nomber of existing units changing ownership during this phase
IMarket Value per unit
( Unencumbered Value per unit (80% of market value)
Amount subject to Froper[y Transfer Tax for all
existing units changing ownership during this phase
�New Units & Existing Units Combined
(Total amount subject to Property Transfer Tax (includes all new units
sold & all existing units changing ownership)
IProperty Transfer Tas Rate
I Total Property Transfer Tax Collected at Phase Buildout
� Peroent of Property Transfer Tax allocated to Palm Desert General Fund
Total Property Transfer Tax Allocated to Palm Desert at phase buildout (for 5-
year period)
INumber of years this phase (to get annual average)
ITotal Annual Property Transfer Tax allocated to Palm Desert at phase buildout
Buildout Phase
Phase I
(Yrs.l-5)
33.2
25
706
$104,425
$73,671,838
Phase II
(Yrs. 6-10)
33.2�
25�
706
$104,425
$73,671,838
141
�
282
�
�23
�
564
56
706
71
127
$104,425
$83,540
$10,605,403
$84,277,241
0.11%
$92,705
50%
$46,352
5
$9,270
847
85
988
99
1129
113
1270
127
1245
125
548
$104,425
$83,540
$45,754,858
$119,426,696
0.11%
$131,369
50%
$65,685
_5
$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
Total tax revenue from existing resid. development
.....from future PD Medium Density residential development
.....from future Riv. Ca Medium-High Density residential development
.....from future Mirasera High Density residential development
.....from future Mirasera Mixed Use residential development
.....from future Mirasera Very High Density residential development
�Total property transfer tax revenue at phase buildout
Buildo-it Phase
Phase I Phase 11
(Yrs 1-5) (Yrs 6-10)
$79,983 $79,983
$15,093 $21,384
$3,275 $4,630
$3,613 $5,119
$937 $1,327
$9,270 $13,137
$112,171 $125,579
Page 13 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenazio A: Sales Ta�c, Measure A
Sales Tax Revenue Measure A Revenue - Scenario A
From Existing Commercial Development
�ana use �esegnanon: c.ommercaat �uoes not rnceuae notey
No. ofAcres: 50.1
Square Fed of Bldg. Space: 480,1181
�Land Use Data
�Number of acres developed
�Number of square feet constructed'
�Calculation of Total Leasable Square Feet
�Percent leasable space
�No. of leasable square feet
� "Neighborhood Commercial" Development2
�Percent of leasable sq. ft. considered Neighborhood Commercial
�No. of leasable sq. ft. considered Neighborhood Commercial
�Ave. annual sales volume per sq. ft.2
Total annual sales from Neighborhood Commercial development
Calculation of Total Sales Tax Revenues
Total annual sales at phase buildout
Tota1 annual sales generated by commercial venues within Sun City'
�Total annual sales generated by all existing commercial development
�County sales tax rate
�Annual sales tax revenue collected by City at phase buildout
ICalculation of Measure A Revenues'
� County-wide Measure A ta�c rate
�Amount collected for County-wide Measure A fund
�Percent allocated to the Coachella Valley region
�Amount allocated to the Coachella Va11ey region
�Percent allocated to loca] streets and roads
�Amount a(located to local streets and roads
�Percent allocated to City of Palm Desert
�Amount allocated to City of Palm Desert
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
50.1� 50.1
480,118� 480,118
90% 90%�
432,106, 432,106
100% 100%
432,106 432,106�
$326.13 $326.13
$140,922,795 $140,922,795
$140,922,795 $140,922,795
$2,465,338 $2,465,338
$143,388,133 $143,388,133
1% 1%�
$1,433,881 $1,433,881
0.50%
$716,941
24%
$172,066
35%
$60,223
20%
$12,045
0.50%
$716,941
24%�
$1'72.066 �
35%�
$60,223 �
20%)
$12,045�
� Assumes building covers 22% of lot. The remaining azea is used for landscaping, pazking, roadway access, and other ancillary uses.
' Based on definitions and average sales volumes for U.S. Neighlwrhood Shopping Centers (Table 6-1), provided in "Dollazs and Cents of
Shopping Centers," Urban Land Listitute, 2008.
' Data provided by Sun City Palm Desert Community As�ciation.
° Measure A distribution data provided by Riverside County Transportation Commission.
14 of 48
TN PD Potential Mnexarion 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
� Land Use Data
�Number of acres developed during this phase
� Number of square feet constructed during this phase'
�Number of acres developed at phase buildout
�Number of squaze feet constructed at phase buildout
�Calculation ofTotal Leasable Square Feet
�Percent leasable space
�No. ofleasable square feet
� "Neighborhood Commercial" Development�
�Percent of leasable sq. ft. considered Neighborhood Commercial
�No. of leasable sq. ft. considered Neighborhood Commercial
�Ave. annual sales volume per sq. ft.2
�Totat annual sales from Neighborhood Commercial development
ICalculation ofTotal Sales Tax Revenues
�Total annual sales at phase buildout
� County sales tax rate
�Annual sales taY revenue collected by City at phase buildout
� Calculation of Measure A Revenues'
� County-wide Measure A tas rate
Amount collected for County-wide Measure A fund
Percent allocated to the Coachella Va11ey region
Amount allocated to the Coachella Va11ey region
Percent allocated to local streets and roads
�Amount allocated to local streets and roads
�Percent allocated to City of Palm Desert
Amount allocated to Ciry of Palm Desert
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
15.7 15.7
149,977 149,977
15.7 31.3
149,977 299,954
90% 90%
134,979 269,959
100%
134,979
$326.13
$44,0?0,823
$44,020,823
1%
$440,208
0.50%
$220,104
24%
$52,825
35%
$18,489
20%
$3,698
100%
269.959
$326.13
$88,041,645
$88,041,645
1%
$880,4 ] 6
0.50%
$440,208
24%
$105,650
35%
$36,977
20%
$7,395
' Assumes building covers 22% of lot. The remaining area is used for landscaping, parking, roadway access, and other ancillary uses.
`Based on definitions and average sales volumes for U.S. Neighlwrhood 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 Counry Transportation Commission.
Sales Tax Revenue Summary Tabie
�Total sales t� revenue from existing commercial development
�Tota1 sales taY revenue from future commercial development
ITotal sales tax revenue from atl development
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$1,433,881 $1,433,881
$440,208 $880,416
$1,874,090 $2,314,298
Measure A Revenue Summary Table
�Total Measure A revenue from existing commercial development
� Total Measure A revenue from future commercial development
�Total Measure A revenue from all development
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$12,045 $12,045
$3,698 $7,395
$15,742 $19,440
15 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: TOT
Transient Occupancy Tax Revenue - Scenario A
From Existing Hotel Development
Land Use Designation: Commercial (Hotel)
Total No. Acres: 3.6
Existing Rooms: 154
Land Use Buildout Data
Number of acres developed
Number of rooms developed
Calculation of TOT Revenue
Average room rate ($ per night)
Average occupancy rate
Annual revenue from all rooms at phase buildout
City's Transient Occupancy Tax Rate
City's annual TOT revenue at phase buildout
From Future Hotel Development
Land Dse Designation: Mirasera Mixed Use Hotel
Total No. Acres: 3.1
Potential Rooms: 1 SO
Land Use Buildout Data
Number of acres developed
Number of rooms developed
Calculation of TOT Revenue
Average room rate ($ per night)
Average occupancy rate
Annual revenue from all rooms at phase buildout
City's Transient Occupancy Tax Rate
City's annual TOT revenue at phase buildout
Buildout Phase
Phase I � Phase II
(Yrs 1-5) � (Yrs 6-10)
3.60
154
3.60
154
$95.00
65%
$3,470,968
9%
$312,387
$95.00
65%
$3,470,968
9%
$312,387
Buildout Phase
Phase I � Phase II
(Yrs 1-5) � (Yrs 6-10)
1.55
75
1.55
150
$145.00
65%
$2,580,094
9%
$232,208
$145.00
65%
$5,160,188
9%
$464,417
Page 16 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: TOT
Transient Occupancy Tax Revenue
Summary Table
Annual TOT Revenue from existing hotels at phase buildout
Annual TOT Revenue from future hotels at phase buildout
Total Annual TOT Revenue from all development
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$312,387 $312,387
$232,208 $464,417
$544,596 $776,804
Page 17 of 48
T'N 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
Buildout Phase
Phase I � Phase II
No. of Existing Units: 4,985 � (Yrs 1-5) � (Yrs 6-10)
Land Use Buildout Data
Number of acres developed at phase buildout 792
Number of total units developed at phase buildout 4,985
Calculation of Annual Motor Vehicle In-Lieu Revenue
Existing Population' 9,000
Anticipated Annual Per Capita Revenue $3.21
Annual Motor Vehicle In-Lieu Revenue at phase buildout $28,890
' Estimated population provided by Paul Brady, Sun City Palm Desert Community Association, October 20ll .
From Future Development
Land Use Designation: PD Medium Density Residential (4-IO
du/ac)
Total No. Acres: 113.3
No. of Potential Buildout Ilnits: 963
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 ofAnnual Motor Vehicle In-Lieu Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
792�4,985
9,000
$3.21
$28,890
Buildout Phase
Phase I
(Yrs 1-5)
56.7
10
482
482
Phase II
(Yrs b-10)
2.08
1,002
$3.21
$3,215
56.7
10
482
963
2.08
2,003
$3.21
$6,430
Page 18 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Pa7m Desert
Scenario A: Motor Veh. In-Lieu
From Future Development
Land Use Designation: Riu Co. Medium-High Density
Residential (S-8 du/ac)
Total No. Acres: 30.8
No. of Potential Buildout Units: 209
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 ofAnnual Motor Vehicle In-Lieu Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motar Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
From Future Development
Land Ilse Designation: Mirasera High Density Residential (12
dulac)
Total No. Acres: 22.6
No. of Potential Buildout Units: 230
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 ofAnnual Motor Vehicle In-Lieu Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
Buildout Phase
Phase I
(Yrs 1-5)
15.4
8
105
145
2.08
218
$3.21
$699
Phase II
(Yrs 6-10)
15.4
8
105
209
2.08
436
$3.21
$1,398
Buildout Phase
Phase I
(Yrs 1-5)
11.3
12
115
I15
Phase II
(Yrs 6-10)
2.08
240
$3.21
$770
11.3
12
115
231
2.08
479
$3.21
$1,539
Page 19 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 Miaced Use Residential (16
dulac)
Total No. Acres: 10. S
No. of Potential Buildout Ilnits: 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
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
From Future Development
Land Use Designation: Mirasera Yery High Density
Residential (20-25 du/ac)
Total No. Acres: 66.4
No. of Potential Buildout Units: 1,411
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
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
5.3
16
71
71
2.08
149
$3.21
$477
5.3
16
71
143
2.08
297
$3.21
$953
Buildout Phase
Phase I
(Yrs 1-5)
33.2
25
706
706
Phase II
(Yrs 6-10)
2.08
1,467
$3.21
$4,710
33.2
25
706
1,411
2.08
2,935
$3.21
$9,421
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
Total Annual Motor Vehicle In-Lieu Revenue from existing
residential development at phase buildout
.....from future PD Medium Density residential development
.....from future Riv. Co. Medium-High Density residential
development
.....from future Mirasera High Density residential development
.....from future Mirasera Mixed Use residential development
.....from future Mirasera Very High Density residential
development
Total Annual Motor Vehicle In-Lieu Revenue from all
development
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$28,890
$3,215
$699
$770
$4'77
$4,710
$38,761
$28,890
$6,430
$1,398
$1,539
$953
$9,421
$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
Land Use Buildout Data
Number of acres developed at phase buildout
Number of total units developed at phase buildout
Calculation ofAnnual Gas Tax Revenue
Existing Population'
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
Buildout Phase
Phase I � Phase II
(Yrs 1-5)
792
4,985
9,000
$23.37
$210,330
(Yrs 6-10)
1 Estimated population provided by Paul Brady, Sun City Palm Desert Community Association, October 2011.
From Future Development
Land Use Designation: PD Mediurr� Density Residential (4-10
du/ac)
Total No. Acres: 113.3
No. of Potential Buildout Units: 963
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 ofAnnual Gas Tax Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
Buildout Phase
Phase I
(Yrs 1-5)
56.7
10
482
482
792
4,985
9,000
$23.37
$210,330
Phase II
(Yrs 6-10)
2.08
1,002
$2337
$23,407
56.7
10
482
963
2.08
2,003
$23.37
$46,813
Page 22 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Motor Veh. In-Lieu
From Future Development
Lartd Use Designation: Riv Co. Medium-High Density
Residential (S-8 du/ac)
Total No. Acres: 30.8
No. of Potential Buildout Units: 209
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 ofAnnual Gas Tax Revenue
�Average No. of Persons Per Household'
�Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
` 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
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 ofAnnual Gas Tax Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
Buildout Phase
Phase I
(Yrs 1-5)
15.4
8
105
105
2.08
218
$2337
$5,090
Phase II
(Yrs 6-10)
15.4
8
105
209
2.08
436
$23.37
$10,181
Buildout Phase
Phase I
(Yrs 1-5)
11.3
12
I15
115
Phase II
(Yrs 6-10)
2.08
240
$23.37
$5,603
11.3
12
115
231
2.08
479
$23.37
$11,205
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: 1Viirasera Mixed Use Residential (16
dulac)
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 Gas Tax Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
From Future Development
Land Use Designation: Mirasera Yery High Density
Residential (20-25 du/ac)
Total No. Acres: 66.4
No. of Potential Buildout Units: 1,411
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 Gas Tax Revenue
Average No. of Persons Per Household'
Potential Population at Phase Buildout
Anticipated Annual Per Capita Revenue
Annual Motor Vehicle In-Lieu Revenue at phase buildout
' 2010 U.S. Census.
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
5.3
16
71
71
2.08
149
$23.37
$3,471
5.3
16
71
143
2.08
297
$23.37
$6,941
Buildout Phase
Phase I
(Yrs 1-5)
33.2
25
706
706
Phase II
(Yrs 6-10)
2.08
1,467
$23.37
$34,294
33.2
25
706
1,411
2.08
2,935
$2337
$68,588
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
Total Annual Gas Tax Revenue from existing residential
development at phase buildout
.....from future PD Medium Density residential development
.....from future Riv. Co. Medium-High Density residential
development
.....from future Mirasera High Density residential development
.. ...from future Mirasera Mixed Use residential development
.....from future Mirasera Very High Density residential
development
Total Annual Gas Tax Revenue from all development at
Phase Buildout
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$210,330
$23,407
$5,090
$5,603
$3,471
$34,294
$282,195
$210,330
$46,813
$10,181
$11,205
$6,941
$68,588
$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 Phase II
(Yrs 1-5) (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.z 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
ITax from Existing Non-Residential Development Greater Than 2,600 sq. ft.
� See footnote below3
�Tax From Vacant Parcels
�No. of vacant parcels 50 50
Prop. A Fire Tax rate (per parcel)' $30 $30
Total Prop. A Fire Tax revenue for vacant parcels $1,500 $1,500
Total Prop. A Fire Tax Revenue - Existin� Conditions $305,400 $305,400
` Tax rates provided by Willdan Financial Services.
Z Terra Nova estimate based on aerial photos and commercial characteristics in annexation area.
' Prop. A Fire Taxes for non-residential development greater than 2,600 sq. ft. in area aze 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
No. of potential buildout dwelling units: 963
No. of Dwelling Units built during this phase
Total Dwelling Units at phase buildout
Prop. A Fire Tax (per SF dwelling unit)'
Total Prop. A Fire Ta�c revenue from future residential development
' Tax rates provided by Willdan Financial Services.
Buildout Yhase
Phase I
(Yrs 1-5)
481.5
481.5
$60
$28,890
Phase II
(Yrs 6-10)
481.5
963
$60
$57,780
26 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. A Fire TaY
From Future Residential Development
Land Use: Medium-High Densiry Residential (S-8 du/ac) (Riv Co.
designation)
No. of acres: 30.8
No. of potential buildout dwelling units: 209
No. of Dwelling Units built during this phase
Total Dwelling Units at phase buildout
Prop. A Fire Tax (per SF dwelling unit)`
Total Prop. A Fire T� revenue from future residential development
' TaY rates provided by Willdan Financial Services.
From Future Residential Development
Land Use: Mirasera High Density Residential (12 dulac)
No. of acres: 22.6
No. of potential buildout dwelling units: 230
No. of Dwelling Units built during this phase
Total Dwelling Units at phase buildout
Prop. A Fire Tax (per SF dwelling unit)'
Total Prop. A Fire Tax revenue from future residential development
' TaY rates provided by Willdan Financial Services.
From Future Residential Development
Land Use: Mirasera Mixed Use Residential (16 du/ac)
No. of acres: 10. S
No. of potential buildout dwelling units: 142
No. of Dwelling Units built during this phase
� Total Dwelling Units at phase buildout
(Prop. A Fire Tax (per SF dwelling unit)'
�Total Prop. A Fire T� revenue from future residential development
' Tax rates provided by Willdan Financial Services.
From Future Residential Development
Land Use: Mirasera i�ery High Density Residential (20-25 du/ac)
No. of acres: 66 4
No. of potential buildout dwelling units: 1,411
No. of Dwelling Units built during this phase
Total Dwelling Units at phase buildout
Prop. A Fire Tax (per SF dwelling unit)'
Total Prop. A Fire Tax revenue from future residential development
' TaY rates provided by Willdan Financial Services.
Buildout Phase
Phase I
(Yrs 1-5)
104.5
104.5
$60
$6,270
Phase II
(Yrs 6-10)
104.5
209
$60
$12,540
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
115 115
115 230
$60 $60
$6,900 $13,800
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
71 71
71 142
$45 $45
$3,195 $6,390
Buildout Phase
Phase I
(Yrs 1-5)
705.5
705.5
$45
$31,748
Phase II
(Yrs 6-10)
705.5
1411
$45
$63,495
27 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Pa1m Desert
Scenario A: Prop. A Fire T�
From Future Commercial Development
Land Use: Commercial (includes hotel)
No. of acres: 34.4
No. of potential square feet: 399,954
�Number of acres to be developed during this phase
�Conversion of acres to number of lots/buildings
�Average acreage of developed commercial lot in annexation area'
�Projected number of commercial buildings built during this phase
�Projected number of commercial buildings built at phase buildout
�Calculation of Fire Tax Revenue
� Prop. A Fire Tax (per commercial building)Z
Total Prop. A Fire Tax revenue from future commercial development
' Average acreage of multiple developed commercial lots in annexation area.
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
17.2 17.2
1.3 1.3
22 22
22 45
$60
$1,342
$60
$2,683
z 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
Number of acres to be developed during this phase
Conversion of acres to number of lots/buildings
Average acreage of developed commercial lot in annexation area'
Projected number of commercial buildings built during this phase
Projected number of commercial buildings built at phase buildout
Calculation of Fire Tax Revenue
Prop. A Fire Taac (per commercial building)Z
Total Prop. A Fire Taac revenue from future commercial development
' Average acreage of multiple developed commercial lots in annexation area.
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
23.4 23.4
1.3 1.3
30 30
30 6l
$60
$1,825
$60
$3,650
2 Tax rates provided by Willdan Financial Services. This analysis assumes that all fut�re 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. of potential square feet: 254,913 (Yrs 1-5)
Number of acres to be developed during this phase
�Conversion of acres to number of lots/buildings
�Average acreage of developed commercial lot in annexation area'
�Projected number of commercial buildings built during this phase
�Projected number of commercial buildings built at phase buildout
�Calculation of Fire Tax Revenue
Prop. A Fire Tax (per commercial building)Z
Buildout Phase
Phase I Phase II
(Yrs 6-10)
13.3 13.3
1.3 1.3
17 17
17 35
$60
Total Prop. A Fire Tax revenue from future commercial development $1,037
' Average acreage of multip(e developed commercial lots in annexation azea.
$60
$2,075
Z T� rates provided by Willdan Financial Services. This analysis assumes that a11 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 pazameters are
building-specific and are unknown at this time.
29 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Prop. A Fire Tax
Prop. A Fire Tax Revenue - Summary Table
Potential Annual Prop. A Fire Tax Revenue from existing
development
.from future PD Medium Density residential development
....from future Riv. Co. Medium High Density residential dev.
from future Mirasera High Density residential development
....from future Mirasera Mixed Use residential development
�.....from future Mirasera Very High Density residential dev.
� . ....from future commercial development
from future business park development
....from future industrial development
�otal Annual Prop. A Fire Tax Revenue from all development (at
hase buildout)
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$305,400
$28,890
$6,270
$6,900
$3,195
$31,748
$1,342
$1,825
$1,037
$305,400
$57,780
$12,540
$13,800
$6,390
$63,495
$2,683
$3,650
$2,075
$386,60'7
$467,813
30 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: City DIF Fees
New Construction Tax Revenue - Scenario A
� Buildout Phase
Phase I
(Yrs 1-5)
INew Residential Development
�Number of dwelling units constructed during tlris phase
�Average square footage of new dwelling unit'
�New Construction Tax rate (per squaze foot)Z
Total New Construction Tax collected on new residential
development
�New Commercial Development
�Number of square feet constructed durinR this phase
�New Construction Ta�c rate (per squaze foot)Z
Total New Construction Tax collected on new commercial
development
�New Commercial (Hotel) Development
�Number of squaze feet constructed durinq this phase
�New Construction Tax rate (per squaze foot)Z
Total New Construction Taic collected on new hotel
development
�New Business Park Development
�Number of square feet constructed during this phase
�New Construction Tax rate (per squaze foot)�
Total New Construetion Tvc collected on new business park
development
�New Industriat Development
�Number of squaze feet constructed during this phase
�New Conslruction Tax rate (per squaze foot)Z
Total New Construction Tax collected on new industrial
develooment
�Total New Construction Tax Reveuue at phase buildout
' TeRa Nova estimate based on permitted density and local residential charactens[ics.
' Palm Desert Building & SafeTy Dept.
1478
1,500
$0.40
$886,500
149,977
$0.40
$59,991
50,000
$0.40
$20,000
224,247
$0.40
$89,699
127,457
$0.40
$50,983
$1,107,172�
Phase II I
(Yrs 6-10)
1478�
1,500�
$0.40�
$886,SOOI
�
149,977�
$0.40�
$59,991
�
50,000
$0.40
$20,000
224,247
$0.40
$89,699
127,457
$0.40
$50,983
$1,107,172�
Page 3'I 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
I � Buildout Phase
� Phase I � Phase II
�New Single-Family Residential Developmeut
�Number of dwelling units constructed during this phase
�Avera�e value (per unit)'
Total value of dwelling units at phase buildout
1% of valuation of all new dwelling units"
�0.25 of 1%valuarion
Total Art in Public Places fees collected on new SF residential
development
�New Mu1ti-Family Residential Development
�Number of dwelling units constructed durinR this phase
�Average value (per unit)'
�Total value of dwelling units at phase buildout
� 1% of valuation of all new dwell ing unitsz
�0.25 of 1 % valuation
ITotal Art in Public Places fees collected on new MF residential
development
�New Commereial Development
�Number of square feet constructed during this phase
�Average value (per squaze foot)'
�To[al value of commercial dev. at phase buildout
� 1% of valuation of all new commercial develupment
� 0.50 of 1% valuation
Totaf Art in Public Places fees collected on new commercial
development
�New Hotel Development
�Number of rooms constructed during this phase
�Average value (per room)'
�Total value of hotel dev. at phase buildout
� 1% of valuation of all new hotel development
�0.50 of 1%valuation
Total Art in Public Places fees collected on new hotel
development
�New Business Park Development
�Number of squaze feet constructed durinq this phase
�Average value (per square foot)'
�Total value of commercial dev. at phase buildout
� 1% of valuarion of all new commercial development
�0.50 of 19io valuation
TMal Art in Publie Places fees collectcd on new commercial
development
�New Industrial Development
�Number of squaze feet constructed during this phase
IAverage value (per squaze foot)'
�Total value of commercial dev. at phase buildout
� 1% nf valuation of all new commercial development
�0.50 of 1%valuation
Total Art in Public Places fees eollected on new commercial
development
Total Art in Public Places Revenue from all new
development at phase buildout
701 701
$249,123 $249,123
$174,635,223 $174,635,223
$1,746,352 $1,746,352
$436,588 $436,588
$436,588 $436,588
777 777
$104,425 $104,425
$81,086,013 $81,086,013
$810,860 $810,860
$202,715 $202,715
$202,715 $202,715I
�
149,977 149,977�
$73 $73�
$1Q94R,321 $10,948,321�
$]09,483 $109,483
$54,742 $54,742
$54,742 $54,742
75
$68,512
$5,138,400
$51,384
$25,692
$25,692
224,247�
$169
$37,897,743
$378,977
$189,489
$189,489
149,977
$73
$10,948,321
$109,483
$54,742
$54,742
$963,967
75�
$68,512�
$5,138,400�
$51,384�
$25,692�
$25,692�
224,247
$169
$37,A97,743
$378,977
$189,489
$1 R9,489
149,977
$73�
$10,94R,321I
$109,483I
$54,742�
$54,742
$963,967
' Asnumes all dwelling units are in a development and, therefore, are not exempt for tlie firs� $100,000 of vatuation.
' Based on compilation of buildmg permrt data pmv�ded by Palm Desert Building & Safety Dept , Octo6er 20ll
° Based on comparable zx�shng highway-sernng hotel in the annexatio�� area, per Riv Co. Assessor's records, Oct 2011.
Page 32 of 48
TN PD Potentia( Anneaation Fiscal Analysis
Ciry of Palm Desert
Scenazio A: City DIF Fees
Low Income Housing Mitigation Fee Revenue - Scenario A
� Buildout P6ase
IP6ase I I Phase II
(Yrs 1-5) (1'rs 6-10)
�New Commercial Development
�Number of square feet constructed during this phase
�Low Income Housing Mitigation Fee rate (per squaze foot)�
�Total Fees from Commercial DeveloDment at phase buildout
�New Hotel Development
�Number of rooms constructed during this phase
�Low Income Housing Mitigation Fee rate (per room)'
�Total Fees from Hotel Development at phase buildout
�New Business Park Development
�Number of squaze feet constructed during this phase
�Low Income Housin� Mitigation Fee rate (per sc�uare foot)'
�Total Fees from Business Pazk Development at phase buildout
�New Indushial Development
�Number of squaze feet constructed durinq this phase
�Low Income Housing Mitigation Fee rate (per squaze foot)�
"I'otal Fees from Industrial Development at phase buildout
ITotal Low Income Housiug Mitigation Fees collected at
�hase buildout
' Palm Desert Bwlding & Safety Dept.
149,977
$1
$149,977
75
$620
$46,500
224,247
$0.50
$1t2,124
127,457
$033
$42,061
$350,661
149,977
$149,977
$620
$46,500
224,247
$0.50�
$112,124�
�
127,457�
$033
$42,061I
$350,661
Child Care Facilities lmpact Mitigation Fee Revenue - Scenario A
� Buildout Phase
P6ase 1 Phase II
(Yrs 1-5) (Yrs 6-10)
�New Comroercial Development
(Number of s9uare feet constructed during this phase
Ii00t%�`,a�. ��uuw
iu�Yaw� ivuugauiru f�L� iaiL �}x,i x�uw�
�Total Fees collected from commercial development
�New Hotel Development
�Number of sc�uare feet cons[ructed durinR this �hase
�uiuw i�uya�i ivuuga��uu 1'l,� ia� �yc� �yuaic
�foot)� `�y
Total Fees collected from hotel development
�New Business Park Development
�Number of sc�uaze feet constructed during this Phase
Ifoot)� ��.., .,.�.�..,�
llL�l6Vl IvllL1S0.l�Vi11 LV t6ll, ��11.1 �l�U0.lV
�Total Fees collected from business pazk development
�New Industrial Development
�Number of sc�uaze feet eonstructed durin� this phase
��,uuu a..a�c 1� a,�uiwn m�pau iruugauuu w iatL �En,i �yua��
frxrt)'
�Total Fees collected from industrial development
ITotal Child Care Facilities Impact Mirigation Fee Revenue
collected from all new development at phase buildoat
' Palm Desert Building & Sa1'eTy Dept.
149,977 149,977
$0.90 $0.90
$134,979 $134,979�
�
50,000 50,000�
$0.77 $0.77
$38,500 $38,500�
�
224,247 224,247�
$1.15 $1.15I
$257,884 $257,884�
�
127,457 127,457�
$0.47 $0.47
$59,905 $59,905
$491,268 $491,268
Page 33 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: City DIF Fees
Traffic Signals Fund Revenue - Scenario A
� Buildout Phase
Phase I Phase 11
(1'�s 1-5) (Yrs 6-10)
�New Residential Development
�Number of dwelling units constructed during this phase
�Tr�c Signals Fund fee (per dwelling unit)�
ITotal Tr�c Signal fees collected on new residential
development at phase buildout
�New Commercial Development
�Number of syuaze feet constructed during this �hase
�Traffic Si�nal Fund fee (per 1,000 square feet)
ITotal Tr�c Signal Funds collected on new commercial
development at phase buildout
�New Hotel Development
�Number of squaze feet constructed dwing this phase
ITraffic Signal Fund fee (per 1,000 square feet)�
ITotal Traffic Signal Funds collected on new commercial
development at phase buildout
�New Industrial Development
�Number of acres constructed during this phax
ITraffic Signal Fund fee (per 1,000 square feet)'
ITotal Traffic Signal Funds collected o�i new commercial
development at phase buildout
�Total Tra�c S�al Fund Revenues at phase buildout
' Palm Desert Pubhc Works Dept.
1478
$50
$73,875
149,977
$500
$74,989
50,000
$500
$25,000
133
$500
$6,650
$180,514
1478
$50
$73,875
149,977
$500
$74,989
50,000
$500
$25,000
133
$500
$6,650
$180,514
Planned Drainage Fund Revenue - Scenario A
I Buildout Phase
Phase I Phase II
I (Yrs 1-5) I (Yrs 6-10)
�All New Development �
Number of acres developed during this phase 175.7I ]75J
Planned Drainage Fund fee (per acre)z � $1,OOOI $1,000�
�Total Planned Draina�e Fund Revenue at phase buildout $175,700+ $175,700
' Falm DeseA Public Works Dept.
Park & Recreation Facilities Fund Revenue - Scenario A
� Buildout Phase
IPhase I I Phase II
(Yis 1-5) (Yrs 6-10)
�New Residential Development (subdivisions only)'
�Number of dwellinq units eonstructed during this phax 1478 1478
IPazk & Recreation Facilities Fee (steP 1)Z 15.88 ] 5.88
�Current Value of Residendal Land (per acre)' $114,887 $114,887�
�Park & Recreation Facilities Fee (step2)' $I,R23,916 $1,823,916�
Total Park & Recreation Facilities Fund Revenue at phase
buildout $1,A23,916 $1,823,916I
' This fee applies only to residential subdiv�sicros. For analysts purposes, it is assumed that all acres designa[ed for
residential developmen[ will be subdivided.
' Palm Desert Pubhc Works Dept
' Average land value of mul[iple vacant parcels destgnated for residenhal development, from Rrverside County Assessor's
da(a, October 201 I.
Page 34 of 48
TN PD Potentiai Annexation Fiscal Analysis
Ciry of Palm Desert
Scenario A: Government Costs
Costs of General Government - Scenario A
�From Existing Residential Development
Land Use: SP-28] Residential � Buildout Ph2se �
No. ofAcres: 792 Phase I Phase II I
No.ofExisBngDwellingUnils:4,985 (Yisl-5) (Yrs6-10)
�Number of acres developed at phase buildout 792 792�
�Number of dwelling units existing at phase buildout 4,985 4,985
�Existing Population� 9,000 9,000�
�Cost of General Govemment (per capita)Z ( $282 $282
�Total annual cost of Geueral Government at phase buildout I $2,538,000 $2,538,000�
' Estimate prov�ded by Paul Brady, Sun City Patm Desert Commumty Associarion, October 2011.
= Terra Nova staff estimate based on popula[ion in City of Palm Desert and CiTy Budget, General Govemment expenditures
2011-2012
�From Futu��e Residen6al Development
�ana use �es�gnanon: r� �viea�um �ensiry ices�oentm� �4-i u I
du/ac) I
No. ofAcres: II3.3
Buildout Phase
IPhase 11
(Y�s 6-10)
�
56.7 56.7�
10 10�
482 482
Phase I
No. ofB��ildord Unrts: 963' � (�'�s 1-�
�Land Use Buildout Data
�Number oF aeres develoPed during phase
�Maximum density permitted (units/acre)
IMaximum potential units constructed during this phase'
INumber of total potential units constructed at phase buildout
�Average number of persons per household2
� Total no. of potenrial residents at phase buildout
�Calculafinq Annual Costs of General Gove�nment
�Cost of General Uovernment (per capita)' I
�Total annual cost of General Govemment at phase buildout
' Assumes future residential developmen[ occurs at 85 % of [he maximum density permitted.
482 963
2.08 2.OR
1,002 2,003�
1
$282 $282
$282,443 $564,887
`2OIO U.S. Ce�1SUs.
' Terra Nova slatTestimate based on populat�on m Crty of Palm Desert and Ciry Budget, Generat Cmvemment expenditures
2011-2012.
From Future Residential Development
Lund Use Designation: Riu Co. Medurm-Higla Density
Residential (5-8 d�dac)
Nn. ojAcres: 30.8
Buildout Phase
Phase I
No. ofBxildorr/ Unifs: 109! (Yrs 1-5)
�Land Use Buildout Data
�Number of acres developed durinR phase I
�Maximum density permiried (units/acre)
IMaximum potential units eonstructed during this phase' �
�Number of total potential units constructed at phase buildout �
�Average number of persons per household�
�Total no. ofpotenrial residents at phase buildout
�Caiculafin� Annual Costs of General Goverument
�Cost of General Government (per capita)' I
�Total annual cost of General Government at phase buiidont i
� Assumes future reside��tial development occurs at 8S°ro of the maximum densily penmtted.
15.4
8
105
105
2.08
218
$282
$61,425
P6ase II
(Yrs 6-10)
�
15.4�
8�
] O5�
209�
2.08
436
�
$282� $122,849
' 2010 U.S. Census
' Terra Nova staff estimate based on population in City of Palm DeseR and City �3udget, General Govemment expenditures
2011-2012.
Page 35 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Government Costs
�From Future Residential Developmeut
Land Use Designution: Mirasera High Densiry Residentia! (12 �
didac) I
No. ojAcres: 22.6
Buildout P6ase
Phase I
No. ofBuildout Units: 230` � (Yrs 1-5)
�Land Use Buildout Data
�Number of acres developed durin� phase
�Maximum density permitted (unitslacre)
�Maximum potential units conshucted during this phase'
�Number of total potential units constructed at phase buildout
�Average number of persons per household2
�Total no. of potential residents at phase buildout
�Calculating Annual Costs of General Gove�nment
�Cost of General Government (per capita)' I
�Total aunual cost of General Govemment at phase buildout
' Assumes future residential development occurs at 85 % of the maximum density permitted.
11.3
12
115
115I
2.08+
240�
$282I
$67,607�
Phase II
(Yrs lr10)
�
113�
12) 115
231 �
2.08�
479�
�
$282I
$135,214+
" 2010 U.S. Census.
' Terra Nova staff estimate based on populatwn m City of Palm Desert and Ciry Budget, General Govemment expendrtures
2011-2012
�From Future Residential Development
Land Use Designation: Mirasern Mixed Use ResidenNal (16
du/ac)
No. ojAcres: 10.5
Buildout Phase
Phase I
No. nJBxildout Units: ]41` � (Yrs 1-5)
�Land Use Buildout Data
�Number of aeres developed durint; phase
�Maximum density permitted (units/acre)
�Maximum potential units constructed during this phase�
�Number of total potential units constructed at phase buildout
�Average number of persons per household"
�Total no. of potential residents at phase buildout
�Calcula6nq Annual Costs of General Government
�Cost of General Government (per capita)' I
�Total annual cost of General Government at phase buildout
' Assumes future res�dential developmen[ occurs at S54o of the maximum deruity permitled.
Phase II
(Yrs 6-10)
53 5.3�
16 16�
71 71�
71 143�
2.08 2.08�
149 297�
$282� $282�
$41,880) $83,761�
=201011.5. Census.
' Terra Nova stafl estimate based on population in City of Palm Desert and City Budget, General Govemment �penditures
2011-2012.
�F�rom Fnture Residential Development
Land Use Designafion: Mi�asera [�ery High Density Residendal �
(20-25 du/ac)
Nn. ofAcres: 6b�4
No. oJBuildout U»its: 1,411'
�Land Use Buildout Data
�Number of acres developed durinR phase �
�Maximum density permitted (units/acre)
�Ma�cimum potential units constructed during this phace'
�Number of total potenrial units conslructed at phase buildout �
�Average number of persons per householdZ
�Total no. of potential residents at phase buildout
�Calculafing Annuat Costs of General Government
�Cost of General Government (per capita)' (
�Total annual cost of General Government at p6ase buildout
Boildout Phase �
Phase I Phase II I
(Yrs 1-5) (Yrs 6-10)
332 33.2
25 25
706 706�
706 1,411�
2.08 2.08
1,467 2,935�
$282� $282�
$413,818 $827,fi36
' Assumes fu[ure res�dent�al development occurs at 75 % of the maximum dens�ty permitted.
Page 36 of 48
TN PD Potential Anneacation Fiscal Analysis
City of Pafm DeseR
Scenario A: Govemment Costs
From Exis6ng Commercial Development
Lana Use: C'ommercia! (inc/udes hote! Xc Commercia! -"['or�rist) � Buildout Phase
No. ofAcres: 80.0 Phase I Phase II
No.ofExislingSyuareFootage:570,117 I (Yrs1-5) I (Y�s6-10)
�Land Use Buildout Data
�Number oF acres develaped at ehase buildout �
�Calculafing Mnusl Costs of General Government (City-wide Services)
�Per acre cost of General Government' I
Total cost of General Ciovemment at phase buildout
�Calculafing Annual Costs of General Government (Municipal Services)
�Per acre cost of General Government (Municipal Services)' �
ITotal cost of General Govemment (Municipal Services) at phase I
buildout
�Calculating Annual Costs of General Govemment (Support Services)
IPer acre cost of General Government (Supoort Services Services)
Total cost of General Government (Support Services Services) at
phase buildout
Total Annual Costs of Govemment Se�vices at Phase Buildout
80.0� 80.0
$29.80 $29.80
$2,384.17 $2,384.17
$024 $024
$19.39 $]939
$63.14
$5',050.95
$7,454.52
$63.14I
$5,050.95
$7,454.52�
Cos[ factors hased on Riverside County Gwde General Fund Net Cost h4ultipliers tor Commercial/Indusirial uses, Table A2.
From Exisfing Development
LandUse:lndxstria!-Light I BuildoutPhase
No. ofAcres: 5�6 Phase I Phase II
No. of Exisdng Sq��are Footage: 542,409 I (Yrs 1-5) I (Yrs 6-10)
�Land Use Buildout Data
INumber of acres developed at phase buildout I
ICalculating Mnual Costs of General Gove��ment (City-wide Services)
IPer acre cost of General Government�
ITotal cost of General Government at phax buildout I
ICalculating Annual Costs of Genersl Government (Municipal Services)
IPer acre cost of Ueneral Govemment (Municipal Services)�
Total cost of General Uovemment (Municipal Services) at phase
buildout
Calculating Annuai Costs of G�eral Gove�nment (Support Se�vices)
Per acre cost of General Government (Sunport Services Services)
I7'otal cost of General Government (Sup�rt Services Services) at
phase buildout
(Total Annual Costs of Government Services at Phase Buildout
56.6I
$29.80
$1,686.80
$0.24
$13.72
$63.14
$3,573.55
$5,274.07
56.6
$29.80I
$1,686.80I
I
$0.24I
$13.72I
I
$63.14
$3,573.55
$5,274.07I
Cov1 fac1ors baced on Riverside Counly Guide Generat Fund Nel Cost �4ullipl�ers for Commercial/fnduslnal uses, Table A2.
Page 37 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Government Costs
From Future Commercial Developmeut
Land Use: C'ommercia! � Buildout Phase
Nn. ofAcres: 31.3 P6ase I Ph
No. ojPntential Spr�are Footage: 299,954 I (Yrs 1-5) I (Yr
�Land Use Buildout Data
�Number of acres developed during ihis phase I
�Number of acres developed at ehase buildout �
�Calcutating Annual Costs of General Govemment (City-wide Services)
� Per acre cost of General Govemment' I
�Total wst of General Government at phase buildout
�Calculating Annual Costs of General Government (Municipal Services)
�Per acre cost of General Govemment (Municipal Services)'
ITotal cost of General Govemment (Municipal Services) at phase I
buildout
15.7I
15.7�
$29.80
$466.40
$0.24I
$3.79
�Calculating Annual Costs of Geueral Goverument (Support Services)
�Per acre cost of General Govemment (Support Services Services) I $63.14
Total cost of General Govemment (Support Services Services) at
phase buildout $988.09
�Total Annusl Costs of Government Services at Phase Buildout � $1,45829
�se II `
; 6-10) I
�
15.7�
31.3�
$29.80�
$932.81�
�
$024�
$7.59I
�
$63.14
$1,976.19
$2,916.58�
Cost tac[ors based on Riverside County Gmde General Fund Net Cost Multipl�ers for Commercial/[ndustrial uscs, Table A2.
From Future Hotel DeveloQmeot
Land Use: Commerciu( (HoteQ � Buildout Phase
Na. ofAcres: 3.1 Phase I Phase II
No. of Potenfial Square Fontage: 90,000 ( (1'rs 1-5) ( (Yrs (r10)
� Land Use Buildout Data
�Number of acres developed during this phase
�Number of acres developed at Qhase buildout
�Calculating Annual Costs of General Govemment (City-wide Se��ices)
�Per acre cost of General Government' �
� Total cost of General Govemment at phase buildout
�Calculating Annual Costs of General Government (Municipal Services)
�Per acre cost of General Government (Municipal Services)` (
�Total cost of General Crovernment (Municipal Services) at phase
buildout
1.6 1.6
1.6 3.1
$29.80� $29.R0
$46.19� $9239
$024� $0.24
$038� $0.75
�Calculafing Annual Costs of Generai Government (Support Services)
�Per acre wst of General Govemment (Support Services Services) $63.14 $63.14
ITotal cost of General Govemment (Support Services Services) at �
phase buildout $97.86 $195.72
�Total Annual Costs of Goverument Services at Phase Buildout $144.43� $288.86
Cost factorc based on ILve�aide County Guide General Fund Net Cost MultipGers for Commercial/Indusiriat uses, Ta6te A2.
From Fufire Bnsiness Park Development
Land Use: Business Park � Buildout Phase
No. ojAcres: 46.8 P6ase I Phase II
Nn. of Po/en6al Square Fontage: 448,494 ( (Y�s 1-5) ( (Yrs 6-10)
�Land Use Buildout Data
�Number of acres developed durinq this Dhase I
�Number of acres developed at ehase buildout
�Calcularing Mnuat Costs of General Government (City-wide Services)
�Per acre cost of General Government' I
�Total cosi of General Government at phase buildout
�Calwlating Annual Costs of Geaeral Government (Municipal Services)
(Per acre cost of General Govemment (Municipal Services)'
ITotal cost of Ueneral Government (Muiucipal Services) at phase I
buildout
�Calculating Mnual Costs of General Goveivment (Support Services)
�Per acre cost of Ueneral Govemment (Suoport Secvic;es Services)
ITotal cost of General Govemment (Support Services Services) at
phase buildout
�Total Annual Costs of Government Services at Phase Buildout
23.4I 23.4�
23.4 46.8
�
$29.80) $29.80�
$69737+ $1,394.74�
�
$0.24I $0.24)
�
$5.67 $1135I
�
$63.14 $63.14�
$1,477.40 $2,954.81)
$2,180.45 $4,360.89�
Co�[ fac4ors based on Riverside County Gu�de General Fund Net Cost Muttipliers for Commercial/Industnal uses, Table A.2.
Page 38 of 48
TN PD Potential Annexation Fiscal Analysis
Ciry of Palm Desert
Scenario A: Government Costs
F�rom Future Industrial Development
Land Use: /ndr�stria! � Buildout Phase �
No. ofAcres: 26.6 Phase I Phase II I
No. of Potenbul Sqnare Footage: 154,913 I (Yrs 1-5) I (Yrs 6-10)
�Land Use Buildout Data I
�Number of acres developed d enR this phase ( 13.3I 133i
�Number of acres developed at hase btildout 133� 26.6
�Calculafing Auuual Costs of General Government (City-wide Services) �
�Per acre wst of General Government' $29.80� $29.80�
�Total cost of General Government at phase buildout l $396.37� $792.74
�Calculating Annual Costs of Geaeral Goverumeut (Municipal Services)
�Per acre cost of General Govemment (Municipal Services)' $0.24� $024
ITotal cost of General Govemment (Municipal Services) at phase I I
buildout $322 $6.45�
�Calculating Annual Costs of Ge►�eral Government (Snpport Services) �
�Per acre cost of General Govemment (Support Services Services) $63.14 $63.14�
ITotal cost of General Government (Support Services Semces) 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 Cos[ Mul[ipliers for Commercialflndusfial uses, Table A1.
Costs of General Government
Summary Table
I
Residential development
Total Annual Govt. Costs from existing residential development at
phase buildout
�.....from future PD Medium Density residential development
�.....from future Riv. Co. Medium-High Density resid. dev.
�.....from future Mirasera High Densiry resididential dev.
�.....from future Mirasera Mixed Use residential development
�.....from future Mirasera Very High Density residential dev.
�Non-Residential development
Total Annual Cost from elcisting Commercial Development at
phase buildout
� .....from exisiing Industdal-Light development
�.....from future commetcial development
�.....from future commercial-hotel development
�.....from future business pazk development
�.....from future industrial development
�Total Annual Govt. Costs at Phase Buildout
Buildout Phase
Phase I � P6ase II
$2,538,000
$282,443
$61,425
$67,607
$41,880
$413,818
$7,455
$5,274
$1,458
$144
$2,180
$1,239
$3,413,867
$2,538,OOOI
$564,887�
$122,849�
$135,214�
$83,761
$827,636i
�
$7,455I
$5,274�
$2,917�
$289� $4,36]
$2,479�
$4,295,120�
Page 39 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Government Costs
Costs of Police Protection - Scenario A
�From Existing Residential Development
Land Use: SP-281 Residential Buildout Phase
Na. ofAcres: 792 Phase I Phase II
No. oJExistingDwelJing Units: 4,985 (Y�s 1-5) (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 Popularion' 9,000 9,000
�Cost of Police Protection (per capita)z $339 $339
�Total annual cost of Police Protection at phase buildout $3,051,000 $3,051,000
' Estimate provided by Paul Brady, Sun Ciry Palm DeseR CommuniTy Associatwn, October 2011.
'' 1'erra Nova staff eshmate based on population in City of Palm Desert and C�ty Budget, Police Protection expenditures 2011-
2012.
�From Future Residential Development
�ana use uesrgnanon: r� �nemiim uens�ry tces�aenttat �4-i o �
dr✓ac)
Nn. ofAcres: 113.3
Buildout Phase
Phase I
No. ofB��ilda�t Units: 963' � (Y�s 1-� �
�Land Use Buildout Data
�Number of acres developed durinR uhase 56.7
�Maximum densiry permitted (units/acre) 10
IMaximum potenrial units constructed during this phase' 482
�Number of total potential units constructed at phase buildout 482
�Average number of persons per householdz 2.08
�Total no. of potential residents at phase buildout 1,002
�Calculating Aunual Costs of Police Protection
�Cost of Police Protection (per capita)' I $339I
�Total annual cost of Police Protection at phase buildout $339,533
' Assumes future residen[ial development occurs at AS°�o of the mawmum density pennitted.
Phase II
(Yrs 6-10)
56.7�
10�
482I
963i
2.08�
2,003
$339
$679,066
' 2010 iJ.S. Census.
' Terra Nova staff estimate baced on population m C�ty of Palm Desert and City Budge[, Police Pmiechon expenditures 2011-
2012.
�From Future Residential Developmeot
Land Use Designation: Riu Co. Medium-High Densily � Buildout Phase
Residentiul (5-8 dn/ucJ
No. ofAcres: .i0.8 Phase I Phase II
No. ofB�rildout Units: 209' (Yrs 1-5) (Yrs 6-10)
�Land Use Buildout Dsta
�Number of acres developed during phase
�Maacimum density permitted (units/acre)
�Maximum potential units constructed durioR this phase'
�Number of total potenrial units constructed at Dhace buildout
�Average number of persons per household2
Total no. of potential residents at phase buildout
Ceiculafing Annual Costs of Police Protection
�Cost of Police Protection (per capita)'
�Total aunual cost of Police Protection at phase buildout
' Assumes futme res�de��hal development occurs at 85 % of tl�e max�mwn de��sity pennitted.
15.4
8
105
105
2.08
218
$339
$73,840
�
15.4�
8�
105�
209�
2.08�
436�
�
$339�
$ I 47,680�
`2010U.S Ca�sus.
' Tena Nova staff esMna[e based on population in City uf Palm Desert and Ctty Budget, Police Pro[ect�on nxpenditures 20t I-
2012.
Page 40 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Government Costs
�From Future Residenrial Developmeut
Land Use Designa6on: Mirasera High Densi[y Resideniral (12 I Buildout Phase
du/ac)
No. ofAcres: 22.6 I Phase I I Phase II
No. ofBuildaut Units: 230' (Yrs 1-5) (Yrs 6-10)
�Land Use Buildout Data
�Number of acres developed during phase
�Ma�imum density permitted (units/acre)
�Maximum potential units conshucted during this phase'
�Number of total potential units constructed at phase buildout
�Average number of persons per householdz
�Total no. of potential residents at phase buildout
�Calculating Annual Costs of Police P�rotecrion
�Cost of Police Protection (per capita)'
�Total annual cost of Police P�rotection at phase buildout
' Assumes Cuture residen[ial development occurs at 85 % of the ma�cimum densiry permitted.
113 11.3
12 12
115 115
115 231
2.08 2.08
240 479
$339I $339
$81,272 $162,544
' 2010 U S. Census.
' Terra Nova staff esiimate based on population in City of Palm Desert and City Budget, Police Protechon expenditures 2011-
2012.
�From Futm�e Residential Development
Land Use Designaiion: Mirasera Mired Use ResidenNal (16 � Buildout Phase
du/ac)
No. ofAcres: 10.5 Phase I Phase II
No. ofBxildau Unirs: 142' (ti'rs 1-5) (Yrs 6-10)
�Land Use Buildout Data
(Number of acres developed during phase
�Macimum density permitted (units/acre)
�Masimum potential units constructed during this phase�
�Number of total potential units constructed at phase buildout
Average number of persons per householdz
Total no. of potenRal residents at phase buildout
�Calcularing Annual Costs of Police Protection
�Cost of Police Protection (per capita)' I
�Total ennual cost of Police Protection at phase buildout
' Assumes Cuture residential development occurs at 85°ro of the maximum density permiried.
53 53
]6 ]6
'71 71
71 143
2.08 2.08
149 297
$339 $339
$50,346 $100,691
' 2010 U.S. Census.
' Terta Nova s1aB eshmate based on populahon in Ciry ot Palm DeseA and City Budget, Police Protection eacpendi[ures 201I-
2012.
�From Future Residential Development
Land Use Designatinn: Mirasera I�ery Nigk Density Residenfial � Buildout Phase
(20-25 drdac)
No. ofAcres: 6�4 Phase I Phase II
No. ofBuildont L/nits: 1,417` (Y�s 1-5) (1"rs 610)
�Land Use Buitdout Data
�Number of acres developed during phase
�Maicimum density permitted (units/acre)
�Maximum potential units construeted during this phase'
�Number of total potential units constructed at phase buildout
�Average number of persons per householdZ
�Total no. of potential residents at phase buildout
�Catculatin� Annual Costs of Police Protecrion
�Cost of Police Protection (per capita)' �
�Total annual cost of Police P�rotection at phase buildout
' Assumes future residential development occurs at 85 % of the maximum densiry pem�itted.
33.2 33.2
25 25
706 706
706 1,411
2.08 2.08
],467 2,935
$339) $339
$497,462� $994,924
= 2010 U.S Census.
' I'erra Nova stafi estimate based on population in Ctty of Palm Desert and Qry Budget, Yolice Protechon e�endttures 20 t 1-
2012.
Page 41 of 48
TN PD Potential Annea;ation Fiscal Analysis
Ciry of Pa1m Desert
Scenario A: Govemment Costs
From Existing Commercia( Development
Land Use: Commercia/ (includes hntel & Commercial - To�irist) �
No. ofAcres: 80.0
No. of Existing Square Footage: 570,117 I
�Land Use Buildout Data
�Number of acres developed at Ehase buildout �
�Calculating Annual Costs of Police Protection (City-wide Services)
�Per acre wst of Police Protection' I
�Total cost of Police Protection at phase buildout �
�Calculating Annual Costs of Police Protecriou (Municipal Services)
�Per acre cost of Police Protection (Municipal Services)'
Total cost of Police Protection (Municipal Services) at phase
buildout
�Total Annual Costs of Police P�rotection at Phase Buitdont
Buildout Phase
P6ase I P6ase II
(Yrs 1-5) (Yrs (r10)
80.0� 80.0
$417.21 $417.21
$33,376.80 $33,376.80
$55.69 $55.69
$4,455.20 $4,45520
$37,832.00 $37,832.00
Cos[ factors based on Rrverside County Guide General Fund Net Cost Mulliphers for Commercial/Indusfial uses, Table A.2.
From Existing Development
Land Use: lndustrial - Light
No. ofAcres: 56.6
No. of Erisdng S4nare Footage: 541,409
Land Use Buildout Data
INumber of acres developed at phase buildout
� Calculating Annual Costs of Police Protecfion (City-wide Se�vices)
IPer acre cost of Police Protection� I
I"Cotal cos[ of Police Protection at phase buildout
ICalculating Annual Costs of Police P�rotection (Municipal Services)
IPer acre cost of Police Proteetion (Municipal Services)'
Total cost of Police Protection (Municipal Services) at phase
buildout
ITotal Annuat Costs of Police Protection at Phase Buildout
Buildout Phase I
Phase 1 Phase II
(Yrs 1-5) (Yrs 610)
�
56.6I 56.6I
$417.21 $41721
$23,614.09 $23,614.09
$55.69 $55.69I
$3,152.05 $3,152.OSI
$26,766.14 $26,7Gt.141
Cost factors based on Rrverside County Gtide General Fund Net Cost Multipliers for Commercial/Industrial ases, Table A.2.
Page 42 of 48
TN PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Govemment Costs
From Future Commercial Development
Land Use: C'ommercia/ �
No. ofAcres: 37.3 I
Nn. ofPotenfial Square Footage: 199,954
�Laud Use Buildout Data
�Number of acres developed during this phase
�Number of acres developed at phase buildout
�Calcularing Annual Costs of Potice Protection (City-wide Services)
Per acre cost of Police Protection'
Total cost of Police Protection at �hase buildout I
�Calcula6ng Annual Costs of Police Protecfion (Municipal Services)
�Per acre cost of Police Protection (Municipal Services)�
Total cost of Police Protection (Municipal Services) at phase
buildout
�Total Annual Costs of Police Protection at Phase Buildout
Buildout Phase �
Phase I I Phase II
(Yrs 1-5) (�'rs 6-10)
15.7I 15.7
15.7� 313
�
$417.21I $41721�
$6,52934 $13,058.67�
�
$55.69 $55.69�
$R71.55 $1,743.10
$7,400.89 $14,801.77
CosK factors based on Rrverside County Guide General Fund Net Cos[ Multiphers for Commeraal/lndustnal uses, Ta61e A2.
From Future Hotel Development
Land Use: Commercia( (Hotel) I
No. ofAcres: 3.1
Nn. of Potentia! Square Footage: 90, 000 I
� Land Use Buildout Data
�Number of acres developed during this phase �
�Number of acres developed at phase buildout
�Calculating Annual Costs of Police Protecrion (City-wide Services)
IPer acre cost of Police Protection' �
Total cost of Police Protecrion at phase buildout
�Calculating Annual Costs of Police Protecrion (Municipal Services)
�Per acre cost of Police Protection (Municipal Services)'
Cotal cost of Police Protection (Municipal Services) at phase
buildout
�Total Annual Costs of Police P�rotection at Phase Buildout
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
].6 ].6�
1.6 3.1
�
$41721I $41721I
$646.68 $1,29335�
I
$55.69 $55.69�
$86.32 $172.64
$733.00 $1,465.99
Cost factors based on Riverside County Gwde Grneral Fund Nzt Cost Multipliers (or Commercial/Industrial uses, Table A2.
From Future Business Park Development
Land Use: Business Park �
No. oJAcres: 46.8 (
No. njPotential Sq��are Footage: 448,494
�Land Llse Buitdout Data
�Number of acres developed during this phase (
�Number of acres developed at Qhase buildout
�Calculating Annual Costs of Police Prolection (City-wide Services)
�Per acre cosK oF Police Protection' I
�Total cost of Police Protection at phase buildout �
�Catculafing Annual Costs of Police Protection (Municipal Services)
�Per acre enst of Police Protectipn (Municipal Services)'
ITotal cost of Police Protection (Municipal Services) at phase
buildout
�Total Annual Costs of Police ProteMion at Phase Buitdout
Buildout Phase
Phase I Phase I1
(Yrs 1-5) (1'rs (r10)
�
23.4 23.4�
23.4 46.8�
�
$417.21I $41721�
$9,762.71 $19,525.43�
�
$55.69 $55.69
$1,303.15 $2,606.29
$11,065.86 $22,131.72
Cosl factors based on Riverside County Gwde Gzneral Fund Net Cost Multipliers for Commercial/Industnal uses, Table A2.
Page 43 of 48
TN PD Potential Annexation Fiscal Analysis
Ciry of Palm Desert
Scenazio A: Govemment Costs
From Futu��e Iudustrial Development
Land Use:/ndxstrial �
No. ofAcres: 2�6 I
No. ojPotentia! Syuare Fnotage: 254,913
�Land Use Buildout Data
�Number of acres developed durinR this phase (
�Number of acres developed at phase buildout
ICalculating Annual Costs of Police Protecfion (City-wide Services)
Per acre cost of Police Protection' I
�Total cosK of Police Protection at phase buildout
�Calculatiug Anuual Costs of Police Protectiou (Municipal Se�vices)
�Per acre cost of Police Protection (Municipal Services)'
Total cost of Police Protection (Municipal Services) at phase
buildout
�Total Annual Costs of Police Protection at Phase Buildout
Buildout Phase
Phase I P6ase II
(Yrs 1-5) (Yrs 6-]0)
133I 13.3
13.3� 26.6
$417.21I $417.21�
$5,548.89i $11,097.79�
�
$55.69 $55.69�
$740.68 $1,48135I
$6,289.57 $12,579.14�
Cost fac[ors based on Rivers�de County Guide General Fund Net Cost Mulhphers for CommercialQndustnal uses, Table A.2.
Costs of Police P�rotec6on
Summary Table
�Residential development
Total Mnual Police Protecrion Costs from existing residential
development at phase buildout
�.....from future PD Medium Density residential develoDment
�.....from future Riv. Co. Medium-Hiqh Density resid. dev.
�.....from future Mirasera High Density resididential dev.
�.....from future Mirasera Mixed Use residential development
�.....from future Mirasera Very High Densiry residential dev.
�Non-Residenrial development
Total Annual Cost from existing Commercial Development at
phase buildout
�.....from exisring Industrial-Light development
�.....from future commercial development
� .....from future commercial-hotel development
�.....from future business pazk development
�.....from future industrial development
�Total Annuat Police Protection Costs at Phase Buildout
Buildout Phas
Phase I
$3,051,000
$339,533
$73,840
$81,272
$50,346
$497,462
$37,832
$26,766
$7,401
$733
$11,066
$6,290
$4,137,575
e j
Phase II +
�
$3,051,000
$679,066�
$147,680
$162,544
$100,691I
$994,924�
�
$37,832I
$26,766�
$14,802�
$1,466�
$22,132�
$12,579�
$5,251,483�
Page 44 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Roadway Maint. Costs
Costs of Roadway Maintenance - Scenario A
Roadway Data
No. of existing public paved road miles in annexation areal
No. of future public paved road miles at phase buildout4
�Total no. of paved road miles at phase buildout
Calculation of Roadway Costs
Annual l;osts ot city-w�de street mamtenance, resurtacmg �i
Improvement Projects3
�Number of paved road miles in current Palm Desert limits3
�Annual Cost of Roadway Maintenance Per Road Mile
Buildout Phase
Phase I ( Phase II
(Yrs 1-5) � (Yrs 6-10)
10.5
2.3
12.8
10.5
4.5
15.0
$6,091,625
159
$38,312
$6,091,625
159
$38,312
Annual Cost of Roadway Maintenance at Phase Buildout $488,478 $574,680
` Terra Nova estimate based on aerial photography. Does not include private roads inside Sun City which will be privately
maintained.
Z Expenditures for street maintenance & resurfacing, City of Palm Desert Budget, 2011-2012.
;"Comprehensive Annual Financial Report," City of Palm Deseri Finance Dept., June 30,2010, p. 201.
° 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
Annual Costs of Operating Fire Station 81 at phase
buildoutl
' Chief Dorian Cooley, Palm Desert Fire Dept., October 2011.
Buildout Phase
Phase I Phase II
(Yrs 1-5) (Yrs 6-10)
$1,500,000 $1,500,000
Costs of Ambulance Service - Scenario A
Buildout Phase
Start-up costs for new ambulance service based out of
Fire Station 81 (one-time fee)
Annual Costs ofAmbulance Operation
Total Annual Costs of Ambulance Service at Phase
Buildout
Phase I
(Year 1)
Phase II
Phase I (Yrs 6-
(Yrs 2-5) 10)
$190,000 $0 $0
$940,944 $940,944 $940,944
$1,130,944 $940,944 $940,944
46 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Costs/Revenues Suminary Table
Total Potential Costs/Revenues Summary Table
Scenario A
ANNUAL REVENUES
General Fund:
� Property Ta�c
�Property Transfer Tax
� Local Sales Tax
� Transient Occupancy Tax
Motor Vehicle In-Lieu Fees
Subtotal
Annual General Fund Revenue at Phase Buildout
Restricted Funds:
Highway Users Gas Taac
� Measure A
�Fire Fund - Prop. A Fire Tax
�Fire Fund - Structural Fire Tax
Subtotal
Annual Restr. Fund Revenue at Phase Buildout
Total All Potential Revenues at Phase Buildout
Interest Earnings:
Historic Average Interest Rate on 90-Day Treasury Bills
�Anticipated Interest Earned on Revenues
I Total Potential
Annuai Revenue at Phase Buildout
ANNUAL COSTS
General Fund:
Costs of General Government
Costs of Police Protection
Costs of Roadway Maintenance
I Subtotal
Annual General Fund Costs at Phase Buildout
�Restricted Funds:
� Costs of Fire Protection
Costs of Ambulance Service'
Subtotal
Annual Restricted Fund Costs at Phase Buildout
Total Potential
Annual Costs at Phase Buildout
� Buildout Phase
Phase I Phase II
(Yrs 1-5) I (Yrs 6-10)
$836,415 $947,279
$112,171 $125,579
$1,874,090 $2,314,298
$544,596 $776,804
$38,761 $48,632
$3,406,032 $4,212,592
$282,195 $354,059
$15,742 $19,440
$386,607 $467,813
$1,402,787 $1,588,723
$2,087,331 $2,430,035
$5,493,362 $6,642,628
4.39% 4.39%
$241,159 $291,611
$5,734,521 $6,934,239
$3,413,867 $4,295,120
$4,137,575 $5,251,483
$488,478 $574,680
$8,039,920 $10,121,283
$1,500,000 $1,500,000
$940,944 $940,944
$2,440,944
$2,440,944
$10,480,864
$12,562,227
�
� Potential Cashflow at Phase Buildout� -$4,746,343� -$5,627,988
� Dces not include one-time (year 1} start-up ambulance costs of $190,000.
Page 47 of 48
T'N PD Potential Annexation Fiscal Analysis
City of Palm Desert
Scenario A: Costs/Recenues Suuimary Table
CITYDEVELOPER IMPACT FEES REVENUES (One time only)
INew 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
$5,093,198 $5,093,198
Page 48 of 48
Terrs Nova/City of Palm Desert
Fiscal Impact Analysis, Potential Anne�ation
Appendix B
Scenario B
Detailed Cost and Revenue Tables
45
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MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING JANUARY 26, 2012
E��I��I�l�b�irC���
�. A. FIS�AL`��`IMPACT`'.,aNa�YSi�� REPQ►Fi��=� REGARDING.P4TENTIAE*3
� AN�lEX�TI4td Bl� THE CITY OF PAtN1�DES�RT �OR AREAS NORT�i 4F.- :'
INTERST�4TE 10�
Mayor Pro Tem Kroonen suggested continuing to a further date so that ali the
parties involved have had an opportunity to review the report.
Mayor Pro Tem Kroonen moved to, by Minute Motion, continue this item to the
meeting of February 23, 2012. Motion was seconded by Finerty and carried by a 5-0 vote.
Mayor Spiegel explained this item was being continued in order to provide
Mr. Bernheimer an opportunity to review the Palm Desert Annexation Study.
XVII. PUBLIC HEARINGS
A. REQUEST FOR APPROVAL OF THE VACATION OF DAISY LANE
RIGHTS-OF-WAY AND EXCESS SIDEWALK, AND LANDSCAPE
EASEMENTS ALONG SHEPHERD LANE IN TRACT NO. 29469
(Kristi Hanson Architects, Inc., Applicant).
Mayor Spiegel stated he believed this item may need to be continued,
because many people who live adjacently to Daisy Lane weren't aware of this
public hearing and learned about it one or two days ago. He said they were
not individually noticed in writing; the only notification made was in the
newspaper in the Classified section. He thought it was only fair for these
residents to get more information, but since many of them were here this
evening, the Council was willing to hear them speak.
Mayor Spiegel declared the public hearing open and invited anyone wishing to
address the City Council on this matter to come forward at this time.
MR. BILL TAYLOR, President of Terracina HOA, stated about one'/z years
ago when KB Homes submitted a request to gate their area, the City sent out
information to everyone in the neighborhood, which explained the request
and what to expect. The community responded to the Council in opposition
and the Council voted it down, which they appreciated. In this case, other
than a 2-foot square sign on Shepherd Lane with limited information, no one
knew what the real situation is all about. He said typically when people want
to install a wall it's not to keep people in, but to keep them out. He personally
didn't disagree with the idea of building it, but felt those affected should be
notified about why and what is being planned.
25
�
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING
�
FEBRUARY 23, 2012
Councilmember Harnik said she would like to amend the motion and only
move forward with the Change of Zone and General Plan Amendment,
because it made sense, but paying money for a conservation easement
didn't.
Councilmember Finerty declined to amend her motion, because she
understood the City Manager to say the City would go forward and zone the
properties open space and continue discussions with the conservation
easement to look at the cost and everything involved. And, she understood
the amended motion was that because of the potential expense, which is
unknown because it hasn't been fully investigated, is to just take it out, which
she wouldn't support.
Councilmember Harnik said her proposed amended motion was correctly
understood.
Mayor Pro Tem Kroonen stated he seconded Councilmember Finerty's
motion observing it was only initiating a process of negotiation and not
drawing any conclusions or entering into any contracts that imply any
expense.
Mr. Wohlmuth added a conservation easement couldn't be placed on this or
any property without Council consideration. He said if there was a need to
place a conservation easement, which he indicated in his staff report, may
not be necessary because of the Zoning change. However, placement of a
conservation easement would require the Council to vote affirmatively,
because it was essentially a contract with a third party to manage the
property. Further responding, he confirmed any costs involved would be
known at that time.
Mayor Spiegel called for the vote, and the motion carried by a 5-0 vote.
�� B. FISCAL.. IMPAGT ANALYSI3- REPORT REGARDING POTENTfAI��
� ANNEXATI�N Bl� THE CITY UF I�PCLM DESERT FOR AREAS NORTH OF �'
WTERSTATE 1a (Continu�d fror» the meeting of Janu�ry 26, 2012). '
Mayor Spiegel stated staff requested this item to be continued, but he had a
speaker card for this item.
Councilmember Harnik recused herself from this item and left the Council
Chamber.
MS. ANNE LEACH, Representative of Sun City, Palm Desert, stated they
supported a postponement of this item, because they are interested in having
this Fiscal Analysis investigated as thoroughly as possible no matter how
long it took, because they were in this for the long haul.
13
�
�
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 23, 2012
Mayor Pro Tem Kroonen moved to, by Minute Motion, continue to the meeting of
March 8, 2012. Motion was seconded by Finerty and carried by a 4-0 vote, with Harnik
ABSENT.
XVI. OLD BUSINESS
None
XVII. PUBLIC HEARINGS
None
XVIII. REPORTS AND REMARKS
A. CITY MANAGER
1. Citv Manaaer Meetina Summaries for the Period of February 1-14,
2012.
Rec: Receive and file.
With City Council concurrence, received and filed.
B. CITY ATTORNEY
None
C. CITY CLERK
1. Consideration of the Appointment of a Delegate and/or Alternate to
the Southern California Association of Governments (SCAG) General
Assembly — April 4-5, 2012, in Los Angeles, California.
Following introduction of the item and discussion amongst
Councilmembers, it was determined that due to the City Council
Budget Study Session having been scheduled for Wednesday, April 4,
it would not be possible to a#tend the SCAG General Assembly.
Therefore, no appointment of a Delegate or Alternate was made.
14
�
_ �
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING
XV. CONTINUED BUSINESS
�
MARCH 8, 2012
A. FIS���°- - IMP�C�'`�AtVA�YSIS:� � REPOt��'�y RE�ARDtIV�.�C�TENTfAL"�
ANNEX�TIQN �1��'H��t�iC�3� PA�NF C'�ES�E���f3��A��iQi:3 NQRTFF OF'=�
IN�T€k�S�A�F��� �tt�,:=.(.�ontinuec�$ frorrr, the� me�tirtg�+ o�Januar�ry.26:, and:,��
Februar�C ���`2012�, _ � .
Councilmember Harnik recused hersslf from this item and left the Council
Chamber.
Ms. Aylaian stated this item had been continued in order to allow a
completion of the analysis of the fiscal impact for potential annexation of
some areas north of Interstate 10 (I-90). She said all the information
requested by Council and interested parties had been collected and was
before the City Council for consideration. She displayed a map showing all
the cities of the Coachella Valley and their spheres of influence. The area for
discussion this evening was the cross-hatched purple color, which is north
of I-10 along with the area shaded in red. Staff analyzed two different
scenarios at the direction of the City Council. Scenario A includes Sun City
and areas west and south of it, which is south of Avenue 38 down to I-10. A
fair amount of the commercial area has been developed as Business Park,
and there are vacant lands besides. With Scenario A, staff took looked at
cost and revenue and costs associated at build-out conditions; staff assumed
the area will build out in approximately 10 years. She displayed a table
summary showing total potential costs and revenues and pointed out that the
highlighted amounts are relevant to the big picture. At the end of Phase Two,
which is considered build out at 10 years from now, there will be
approximately an annual revenue of $6.9 mi(lion and $12.5 million in costs,
which would lead to an annual deficit of $5.6 million. Scenario B includes the
same areas in Scenario A, and lands to the west, the Classic Club, and some
areas just west of Cook Street, but staying on the east side of Jack Ivey
Ranch. The costs and revenues are more favorable, but it still produces a
deficit. The build out of this overall area was assumed to take 20 years
rather than 10, because there are more undeveloped lands. At the end of the
20-year build-out period, there is approximately an annua! revenue of $91
million and $14.7 million of expenses, which leads to an annual deficit of $3.4
miAion that would need to be covered by the General Fund or another
revenue source. The Summary of the Fiscal Impact Analysis that looks at
build-out conditions, assuming that all the infrastructure is adequate and in
place, shows that with Scenario A there is a deficit of $5.5 million a year and
a deficit of $3.4 million with Scenario B. Staff also looked at a one-time
revenue source that is non-recurring and non-annual. With Scenario A, there
would be a one-time $10.2 million from Developer Impact Fees and $18.9
million with Scenario B. Additionally, staff asked the Public Works
Department to take a cursory look at existing infrastructure deficiencies north
10
�
�
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING MARCH 8, 2012
of i-10 to see what kind of magnitude or impact that would be as advice to
the Council. The information pravided indicates $22 million for Scenario A
and $44 miNion for Scenario B of a one-time cost that would be needed. She
reiterated this was just a cursory look, and results should be interpreted as
costing tens of miNions of dollars and nothing more to bring existing
infrastructures up to the standards of Palm Desert. In conclusion, she said
staff was looking for direction from the City Council for additional studies or
further consideration of annexation of any of the areas north of I-10. She
noted there are interested parties present this evening that may wish to
speak to the Council.
MR. JOHN WILLACKER, Representative of Sun City Homeowners
Association, stated they recognized the Fiscal Analysis findings, but
disappointed results weren't more favorable. However, in the long run, they
would like to find a way to be part of the City of Palm Desert, because it was
part of their personal address, it is where they go to church, shop, and enjoy
themselves. He complimented staff, Ms. Aylaian, and Mr. Wohlmuth for their
openness and beyond, which they appreciated. He believed there will be an
opportunity in the future to revisit this issue and hopefully the financials will
look better.
MR. ROB BERNHEIMER, Representing H N& Frances C Berger
Foundation, stated the Foundation was an interested party in this discussion
as they are probably the largest landowners in the area that's being
considered for possible future annexation. With regards to the Fiscal Report,
he didn't believe it was all that accurate, but tweaking it here and there
probably wouldn't change the results given the parameters provided to staff.
He said this wasn't about Palm Desert annexing this whole area and applying
its City standards across the board to make it financially work. If the City
was interested in annexation, it will need to step back and say it is willing to
develop a new planning and zoning standard for areas north of I-10 and iook
at something from a fiscai perspective to make it work. A directive in the
future toward staff might ask for a plan for annexation that creates fiscal
neutrality, because that will bring back options to the Council, which may
require people to accept a parcel tax to those developers that have vacant
lands or change their plans to create projects that are more revenue
producing. The Council may have a whole laundry list of options that wil!
create positive fiscal results. He said in today's world it is possible, but it will
require some direction from the City Council to plan for north of the I-10
differently than the rest of the City. He said the Berger Foundation believes
it is part of the fabric of the City of Palm Desert, because it's been part of the
development and certainly of the College campuses, and a major financial
contributor on both sides of the freeway. He said the Berger Foundation
believes there is a link between the Classic Club, Xavier Prep High School,
their land, and whaYs been built at the college area. Even with the
parameters of the Fiscal Analysis of Scenario B, if the Council just annexed
11
�
�
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING MARCH 8, 2012
the 650 acres, it would produce a positive fiscal for the City. He thanked staff
for extending a lot of time and consideration and hoped the City kept the
annexation open in the future, because the Berger Foundation would like to
be part of the City of Palm Desert.
Councilmember Finerty stated as much as she knew Del Webb Sun City
would like to be part of Palm Desert, and obviously the Council would like to
include them, unfortunately, it didn't pencil out. She said it didn't pencil out
in good times and it wasn't penciling out in these tougher times either. She
said the bigger subject hadn't been addressed, which was what to do with
Bermuda Dunes, because LAFCO would not allow Palm Desertto cherry pick
and go across I-10 and annex the nicely developed areas in Sun City. She
too, hoped it was not the final discussion, and when things turn around, it will
be revisited to see if things rendered a different direction. However, for now,
considering the 50,000 residents of Palm Desert, she believed it was in their
best interest to not move forward at this time, but not close the door
completely either.
Councilmember Benson stated her opinion was similar to Councilmember
Finerty's, knowing the fact that the County was in such dire straights. She
said it would be an uphill battle at this time, because the County was not
about to release that revenue producing commercial area; years ago they
were reluctant to let it go, because they needed that money. She believed
that area will be annexed, but this was not the time to be undertaking
anything that will place the City further in the hole. With the demise of the
Redevelopment Agency, it will take several years for that to work itself out.
The City needs to downsize to something the current budget can manage,
let alone adding $5- or $10 million more to the budget. She agreed to leaving
the door open on the issue, but she didn't believe jumping over to I-10 at this
point was fiscally responsible.
Mayor Pro Tem Kroonen stated that while he was not in substantial
disagreement with either of his colleagues, he hoped the Council will take a
slightly different approach to the cur�ent issue. He referred to the Frederick
Jackson Turner's Manifest Destiny Document, and said that without getting
overly academic about this issue, his intuition told him that at some point
down the road, Palm Desert will want to do significant things on the north
side of I-10. To that point, he suggested that within the next year or so, the
Council sit down and initiate again a planning process, which at one time was
lead by Councilmember Benson, to review the City's overall General Plan. He
noted he served as a citizen member of that committee years ago when it
discussed the north sphere across I-10, but it didn't do much about it.
However, because Palm Desert was changing in many dramatic ways, all
options needed to be kept open, and at the appropriate time, take steps for
further action with regards to understanding what is happing out there. He
said the City was entering a new era, which hopefully will bring about new
12
�
�
MINUTES
REGULAR PALM DESERT CITY COUNCIL MEETING MARCH 8, 2012
opportunities and new solutions. Therefore, as opposed to closing the door
now, he would like to keep this topic alive, move forward as new information
and approaches become available, and not exclude the possibility for the
Council to be able to make this arrangement work.
Mayor Spiegel concurred, stating today's newspaper stated there are some
wonderful people living in Sun City, of which some were here in attendance
this evening. He said he didn't want Palm Desert to lose the sphere of
influence it had over Sun City, and he would like to investigate whether or not
the Berger Foundation could be included, but not until it was fiscally
responsible.
Mayor Pro Tem Kroonen, moved to, by Minute Motion, continue to a date uncertain
for further ongoing review of the matter as it relates to future planning activities in the City.
Motion was seconded by Finerty.
Councilmember Finerty said it made her nervous whenever any item is
continued indefinitely, because it meant the item will die and go nowhere, but
if Council wanted to look at a plan in 2020 or revisit the General Plan, the
Council needed to decide where it wanted to go as a City and whether or not
that included going north of I-10. She was comfortable with having this
matter continued to a date uncertain, but preferred it be worded into whatever
the future planning program would be.
Mayor Pro Tem Kroonen stated his motion asked for no action, but only to
not close the door to annexation pending further planning activities. Because
of the many changes the City was undergoing now, he felt•strongly the
Council needed to re-engage in the overall General Plan process. "
Mayor Spiegel called for the vote, and the motion carried by a 4-0 vote, with Harnik
ABSENT.
XVI. OLD BUSINESS
None
i[c3
TECHNICAL ADDENDUM
TO
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
Terra Nova Planning & Research, Inc.
42635 Mela�ie Place, Ste. 101
Palm Desert, CA 92211
February 8, 2012
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
TECHNICAL ADDENDUM
TO
FISCAL IMPACT ANALYSIS FOR
POTENTIAL ANNEXATION
TO THE CITY OF PALM DESERT
L PURPOSE
This Technical Addendum is being prepared to address changes to the original "Fiscal Impact
Analysis for Potential Annexation to the City of Palm Desert," which was submitted to the City
of Palm Desert in January 2012.
Specific Plan 151 (SP-151), which is located in Scenario B under consideration for annexation,
has been revised; the revised plan is referred to as Specific Plan 343 (SP-343), "NorthStar." Like
SP-151, SP-343 is centered around the existing golf course (The Classic Club) and clubhouse,
and it continues to allow for commercial and office/business park development. Revisions
include the provision of single- and multi-family dwelling units, including timeshares, and light
industrial uses. The revised plan also allows for a modest increase in hotel development, and
requires the existing gravel/construction site to be removed for future development. Please refer
to Exhibit 1 for the SP-343 Conceptual Land Use Plan.
II. REVISIONS
Land use tables for Scenario B have been revised, as shown below, to remove SP-151 and
replace it with SP-343. Table 1 describes developed acreage in Scenario B, and Table 2 describes
vacant acreage.
2
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
Land Use Designation
Inside Scenario A:
SP-281 Single-Family Residential
SP-281 Golf Course
SP-281 Commercial
SP-281 Commercial (Hotel)
Riv. Co. Commercial Retail
Riv. Co. Commercial (Hotel)
Riv. Co. Comm./Tourist (RV Park)
Riv. Co. Industrial - Light
SP-281 Fire Station
I-10 Corridor
Railroad Conidor
Outside Scenario A:
Table 1
Scenario B - Developed Acreage
(Revised to Reflect SP-343)
Existing Existing Existing
Dwelling Square Hotel Existing
Acreage Units' FootageZ Rooms Population'
792.0
435.3
29.0
2.2
21.1
1.4
26.3
56.6
3.5
79.2
3 8.8
4,985 SF
277,912
50,0004
202,205
40,0004
542,409
72
82
9,000
Single-Family Residential 1.3 1 SF -- -- 2
SP-343 Golf Course/Facilities 245.9 -- -- -- --
SP-225 Private School 96.0 -- -- -- --
SP-225 RV Storage 5.2 -- -- -- --
Agriculture 9.3 -- -- -- --
I-10 Conidor 52.8 -- -- -- --
Railroad Corridor 34.1 -- -- -- --
Total: 1,930.0 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.
3 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).
° Estimate for 72-room and 82-room hotels.
3
T'N/City of Palm Desert
Tech. Addendum/Potential Annexation
Table 2
Scenario B - Vacant Acreage
(Revised to Retlect SP-343)
Potential
Dwelling
Land Use Desi�nation Acreage Units'
Non-Devetopable
Inside Scenario A:
SP-281 Community Association
Public Utility (IID, CVWD)
Public Agency (County, State)
Riv. Co. Open Space/Water
Mirasera Open Space/Parks/Roads
Outside Scenario A:
SP-225 Regional Circulation
Non-Developable Subtotal:
271.0 --
18.1 --
5.3 --
10.4 --
39.5 --
6.4 --
350.7
Potential Potential
Square Hotel Potential
Footage2 Rooms Population'
Developable
[nside 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 N�' -- -- 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-343 Deluxe Golf-View Hotel 17.6 -- 350,000 350 --
SP-343 Resort Golf-View Villas (7.4 du/ac) 7.3 46 SF -- -- 96
SP-343 Resort Timeshares (21.7 du/ac) l0A 184 MF -- -- 383
SP-343 Golf-View Condos (16.6 du/ac) 33.2 468 N�' -- -- 973
SP-343 MixedUse Retail Village (4.14 du/ac) 36.2 127 MF 346,912 -- 264
SP-343 Industrial Park 69.6 -- 666,991 -- --
SP-343 Executive Office 16.0 -- 153,331 -- --
SP-343 Community Commercial 20.0 -- 100,000 -- --
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: 723.0
Total: 1073.7 4,085 3,363,627 500 8,493
� 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 squaze footage will cover 22% of the lot, with the remainder of the lot available for access roads,
parking, landscaping, and other ancillary uses. Exception is SP-343 Community Commercial, where the Specific Plan calls for
a maximum of 100,000 sq. ft. at build out, which is less than 22% lot coverage. Hotel square footage is estimated for one 150-
room highway-serving hotel in Mirasera, and one 350-room resort hotel in SP-343.
3 Based on Palm Desert average of 2.08 persons/household (2010 U.S. Census).
4
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
III. BUILDOUT COMPARISON
The following table compares build out of vacant acreage in SP-151, as described in the original
report, and build out of vacant land in SP-343.
Table 3
Build out Comparison by Land Use Category
SP-151 and SP-343
Land Use Category SP-151 SP-343
Hotel Facilities 250 rooms 350 rooms
200,000 sq.ft. 350,000 sq.ft.
Resort Golf-View Villas 0 46 SF du's
Resort Timeshare Units 0 184 MF du's
Golf-View Condos 0 468 MF du's
MixedUse Retail Village - residential 0 127 MF du's
- commercial 0 346,912 sq. ft.
Industrial Park 0 666,991 sq. ft.
Executive Office/Business Park 987,070 sq.ft. 153,331 sq.ft.
Community/Service Commercial 295,162 sq.ft. 100,000 sq.ft.
SF du = single-family dwelling unit; MF du = multi-family dwelling unit
Difference
+100 rooms
+150,000 sq.ft.
+46 SF du's
+184 MF du's
+468 MF du's
+127 MF du's
+346,912 sq. ft.
+666,991 sq.ft.
-833,739 sq.ft.
-195,162 sq.ft.
Build Out Assumntions
Build out values have been calculated using the same methods and assumptions as those used in
the original fiscal analysis. For residential land uses, it is projected that the number of dwelling
units at build out will be 85% of the maximum permitted density (_ # acres x maximum
du's/acre x 85%). Dwelling units in SP-343 were determined to be single-family or multi-family
based on descriptions provided in the NorthStar Specific Plan.
For commercial, office/business park, and industrial land uses, it is projected that future building
square footage will be equivalent to 22% lot coverage (_ # acres x 43,560 sq.ft./acre x 22%).
This level of building coverage is typical of traditional single-story development in the region;
remaining lot square footage is necessary to meet local parking and landscaping requirements.
This methodology was used in the original fiscal analysis, and it is duplicated here. An exception
occurs in the SP-343 Community Commercial category, where the Specific Plan projects less
than 22% lot coverage, for a maximum build out of 100,000 square feet.
Based on the SP-343 Conceptual Land Use Plan, this revised analysis estimates that build out of
SP-343 will add 3.0 more paved roadway miles to Scenario B.
Build out Dwellins Units and Poaulation
As shown in Tables 3 and 4, build out of SP-343 is projected to result in the development of 825
more dwelling units than SP-151. With an average household size of 2.08 persons per household
in Palm Desert, this equates to a population of 1,716 more residents than that projected in the
original fiscal study. Should annexation of Scenario B occur, a total potential Scenario B
population of 17,495 would be added to the City's existing population.
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
Table 4
Comparison of Dwelling Units & Population
SP-151 and SP-343
At Build out SP-151 SP-343 Difference
No. of Dwelling Units 0 825 +825
Potential Population in Specific Plan Area 0 1,716 +1,716
Potential Population in All of Scenario B 15,779 17,495 +1,716
` Population projections are based on average 2.08 persons/household in City of Palm Desert, U.S. Census, 2010.
[V. TIMESHARES
In the City of Palm Desert, the revenue stream from timeshares can vary widely from one project
to another. Transient Occupancy Tax (TOT) is collected on timeshare units that are rented for
less than 30 days; TOT is 9% of the rental rate. In addition, if the proposed timeshare project
does not include a golf course and hotel with 500 or more rooms, the City negotiates with the
developer to collect one-time development fees and recurring annual fees based on the number of
units being developed.
SP-343 designates 9.95 acres for Resort Timeshare development, at a density of 21.7 dwelling
units per acre. Assuming build out will occur at 85% of the maximum permitted density, 184
units could be constructed. The Specific Plan also includes an existing golf course (The Classic
Club) and proposes a 350-room resort hotel. Therefore, the timeshare portion of the project will
generate revenues from TOT, one-time fees at the time the project is constructed, and recurring
annual fees.
The fiscal model has been revised to include future revenues from timeshare development in SP-
343 using per unit estimates provided by the City's Finance and Community Development
Departments. Based on other timeshare development in the City, TOT revenue of $600/unit/year,
one-time development fees of $750/unit, and recurring annual fees of $1,500/unit/year are used
in this analysis. Build out of the Specifc Plan area is assumed to occur evenly over a 20-year
period, with costs and revenues shown in 5-year increments.
V. COST/REVENUE COMPARISON
Potential costs and revenues to the City of Palm Desert resulting from annexation of Scenario B
were projected in the original report. Using the same fiscal model, they have been revised to
delete the SP-151 build out scenario, and replace it with the SP-343 build out scenario. Tables 5
and 6 show potential costs and revenues, as revised to reflect SP-343.
Compared to the original analysis, build out of SP-343 is projected to result in modest increases
in all revenue categories analyzed. At the end of the 20-year buildout period, total revenues are
projected to be $11.3 million/year, which represents an increase of 14.8% over that shown in the
original report. This is largely the result of adding dwelling units, population, and hotel rooms to
0
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
the Specific Plan area, and including sales tax generated by the existing clubhouse at The Classic
Club, as well as potential revenues generated by future timeshares.
One-time revenues generated by Developer Impact Fees (DIF) are also projected to increase
modestly due to more construction in the Specifc Plan area and one-time timeshare development
fees. Potential DIF revenues are projected to be $4.7 million at build out of each phase during the
20-year build out period. This represents an 8.5% increase over DIF revenues shown in the
original analysis.
Given the potential of SP-343 to develop 825 more dwelling units and accommodate 1,716 more
residents than SP-151, the costs to the City for providing public services to the area will also
increase. Costs include those required for general government operations, roadway maintenance,
and the provision of emergency services. Annual costs at the end of the 20-year build out period
are projected to be $14.7 million/annually. This represents an increase of 11.4% over the original
report.
After replacing SP-151 with SP-343, potential cash flow to the City at 20-year build out is
projected to be a deficit of -$3.4 million/year. This is 1% more than that anticipated in the
original fiscal analysis and is largely due to the costs of providing public services to an increased
build out population.
7
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
Table 5
Total Potential Costs/Revenues Summary Table
Annexation Scenario B(revised to include SP-343)
� Build out Phase
Phase I I Phase II Phase lI[
(Yrs 1-5) (Yrs 6-10) (Yrs 11-15)
ANNUAL REVENUES
General Fund.•
Property Tax
Property Transfer Tax
Sales Tax
Transient Occupancy Tax (from hotels/motels)
Transient Occupancy Tax (from timeshares)
Annual Timeshare Fees
Motor Vehicle In-Lieu Revenue
Total Annual General Fund Revenue at Phase Buiid out:
Restricted Funds:
Highway Users Gas Tax
Measure A Funds
Prop. A Fire Ta�c
Structural Fire Tax
Total Annual Restricted Fund Revenue at Phase Build out:
Totnls:
Total Annual Revenues at Phase Build out:
Historic Average Interest Rate, 90-day Treasury Bill:
Anticipated Interest on Revenues:
Total Annual Revenues with Interest at Phase Build out:
ANNUAL COSTS
General Fund:
General Government
Police Protection
Roadway Maintenance
Total Annual General Fund Costs at Phase Build out:
Restricted Funds:
Fire Protection
Ambulance Services
Total Annual Restricted Fund Costs at Phase Build out:
Totnls:
Total Annual Costs at Phase Build out:
Projected Annual Cashflow at Phase Build out:
$828,051
$99,321
$2,351,230
$699,401
$27,600
$69,000
$35,720
$4,110,323
$260,057
$19,750
$362,310
$1,390,525
$2,032,642
$6,142,965
439%
$269,676
$6,412,641
$915,581
$100,819
$3,082,812
$1,086,415
$55,200
$ I 38,000
$42,544
$5,421,371
$309,737
$25,896
$417,360
$1,537,325
�2,290,318
$7,711,689
4.39%
$338,543
$8,050,232
$ i,003,111
$102,317
$3,814,394
$1,473,429
$82,800
$207,000
$49,368
$6,732,419
$359,417
$32,041
$472,410
$1,684,125
$2,547,993
$9,280,412
4.39%
$407,410
$9,687,822
$3,152,797 $3,759,641 $4,366,485
$3,847,211 $4,605,243 $5,363,275
$508,143 $587,731 $667,327
$7,508,151 $8,952,616 $10,397,087
$1,615,994 $1,731,582 $1,847,171
$940,944' $940,944' $940,944'
$2,556,938 $2,672,526 $2,788,115
Phase [V
(Yrs 16-20)
$1,092,730 �
$103,815 I
$4,545,977 I
$1,860,443 I
$110,400 I
$276,000
$56,192
$8,045,557
I
$409,097 I
$38,186
$527,460
$1,834,430
$2,809>174 �
$10,854,731 �
4 39%
$476,523
$11,331,253 I
$4,973,329 I
$6,121,307 �
$746,916 I
$11,841,553 I
$1,962,759
$940,944'
$2,903,703
$10,065,089 � $11,625,142 $13,185,202 � $14,745,256
-$3,652,448 -$3,574,910 -$3,497,379 -$3,414,002
' Does not include one-time (year 1) start-up ambulance costs of $190,000.
8
TN/City of Palm Desert
Tech. Addendum/Potential Annexation
Table 6
Developer Impact Fee Revenues (One time only)1
Annexation Scenario B
(revised to include SP-343)
New Construction Tax
� Art in Public Places Fund
� Low Income Housing Mitigation Fee
� Child Care Program Fund
� Traffic Signals Fund
� Planned Drainage Fund
� Parks & Recreation Facilities Fund
� Timeshare Development Fees
� Total Developer Impact Fee Revenues
Phase I
(Yrs 1-5)
$949,113
$698,162
$560,396
$705,257
$243,961
$180,750
$1,353,736
$34,500
Build ou
Phase II
(Yrs 6-10)
$949,113
$698,162
$560,396
$705,257
$243,961
$180,750
$1,353,736
$34,500
at Phase Build out: $4,725,875 $4,725,875
' Developer impact fees occur only once, at the time the unit is permitted.
Phase
Phase III
(Yrs 11-15)
$949,113
$698,162
$560,396
$705,257
$243,961
$180,750
$1,353,736
$34,500
$4,725,875
Phase IV
(Yrs 16-20)
$949,113
$698,162
$560,396 �
$705,257 I
$243,961 �
$180,750
$1,353,736 I
$34,500 �
$4,725,875
E
��J:��'?LttY�G C6�'1I`
•n.sc,n d me o.,.�� V
CITY OF CATHEDRAL CITY
CtTY COUNCIL
S7UDY SESSION REPORT
SUBJECT: Presentation of the Fiscai Analysis and Plan for Services for the Cathedral
City Sphere of Influence within the Unincorporated Community of Thousand
Palms and Discussion of Next Steps
DEPARTMENT:
CONTACT PERSON:
APPRQVED:
Economic Deve(opment
Leisa l.ukes, RLA
+ �N..(/.�
c omi Development
MEETING DQTE:
DEA�LINE FOR ACTION:
City Ma ger
March 27, 2013
N/A
BACKGROUND
Finance
Cathedral City's Sphere of Influence (S�I} includes the area north of Interstate 10 from the
City's easterly boundary (DaVall Drive extended) to just west af Washington Street and covers
most of the unincorporated community of Thousand Ralms, generally excluding the Coachella
Valley Multiple Species Habitat Conservation area. It covers approximately 9,700 acres, with an
estimated populatian af 7,715. This extended Sphere area was approved by the Riverside Local
Agency Formatian Commission (LAFCO} in December 2011 and was supported by the Thousand
Palms Community Council, the Thousand Palms Chamber of Commerce, and the boards of the
two country clubs in the community. The City pursued its expanded SO! for planning purposes
and to determine the City's directian for future expansion and fiscai stability.
In February 2012, The City Council authorized Ra1ph Andersen & Associates (Consultant) to
prepare a Fiscal Analysis and Plan for Services suitable for submittal to LAFCO should the City
Council determine that it would be advantageous ta pursue annexation of its Sphere area. John
Goss, Senior Associate, serves as the consultant project manager. Mr. Goss reviewed existing
documents, conducted interviews, and performed a series of field examinations. He then
prepared an analysis of the information and calculated the fiscal feasibility af annexing the
entirety of the City's SOI. The findings are summarized below. The complete Fiscal Analysis and
Plan for Services for the City of Cathedral City Sphere of Influence within the Unincorporated
Community of Thousand Palms (Study) is attached.
FINDINGS AND ANAlY515
The purpase of the Study is to provide a fiscal analysis of the potential annexation of tiie City's
SOi, both at the initial year of annexation as weil as at build out. It also includes a Plan for
Services as required by Riverside LAFCO, which spel{s out how the demand for local services will
be met when the annexed area is completeiy developed.
To complete the Study, the Consultant examined a number of financial and policy documents
from the City, the County, lAFCO, and several special districts that currently serve the
Thousand Palms community. Interviews were conducted with City, County, LAFCO and various
f
City Council Study Session Report
March 27, 2013
Page 2
special district staff, well as with representatives of developers who have an interest in the
Sphere area. Significant research was performed to identify the impacts the potential
annexation may have on the City, surrounding local agencies and the Thousand Palms
Community.
The analysis assumed the future Berger Foundation and Messenger projects are closer to being
development ready than the rest of the unincorporated Thousand Palms community. The
Berger Foundation specific plan includes the area surrounding the Classic Club Golf Resart and
the Messenger specific plan encompasses the area between the City's current eastern
boundary and approximately Rio Del Sol Road.
ihe Plan for Services (Study, Chapter IV) anticipates that there will be no change in most
providers supplying local services to Thousand Palms. As shown an Table IV-A of the Report,
utility services such as water, wastewater, flood control (Coachella Vafley Water District),
electricity (Imperial Irrigation District or Southern California Edison�, na#ural gas (Southern
California Gas Companyj, and garbage collection (Burrtec) will continue ta provide their
respective services if annexation occurs. Animal control services will continue to be provided
by County Animal Control. Also, rnaintenance services, through a special assessment district,
and recreation services will continue ta be provided by the Desert Reereation District, with
library services provideci by rhe County library System and schools aperated by the Palm
Springs Unified School District.
It is anticipated that the provision of law enforcement services would, however, be transferred
from the Riverside County Sheriff's Department to the Cathedrai City Police Department. Street
maintenance and street sweeping is alsa anticipated to be shifted from the County to the City,
with the City providing these services at initial annexation through build out under this Plan.
The Consultant noted that the provision of fire and emergency medical services (EMS)
presented a more complex issue in devefoping the Plan of Services. The Study evaluated three
options: (1} the City assumes fire/EMS services upan annexation; (2) the Coun#y through Cal
Fire continues to provide services to Thousand Palms a# Fire Station 35; and (3) the County
supplies fire/EMS services to this area transitiontng to City services a number af years later.
Because of cast and operationaf considerations, the Study concludes that upon annexation the
City should contract with the County (Cal Fire) for fire/EMS services (Option #2). Whether
Option 3 can be implemented several years from now depends on the City and County resolving
certain financial and operational issues outlined in the Study.
In terms of financing the services, the Consultant evaluated operating revenues/expenditures
during the initial year of annexation, as well as at five and ten years and at build out. Chapter II
of the Study is devoted to the crucial initia( year of annexation since the City has had recent
financia! challenges and Thousand Palms is not a high tax ratable area.
The Study demanstrates that during the first year, assuming that fire Option #2 is selected, the
City could provide services at or above the level of service eurrently being received by the
Thousand Palms Community. The level of police service in terms of officers assigned to the
Sphere area would be higher than what is presently being provided in that area. Because the
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City Council Study Session Report
March 27, 2013
Page 3
"developed" portion of Thousand Palms is physically separate from the "deveioped" part of
Cathedral City and because Thousand Palms is several miles long, two palice patrol beats would
be required as part of the basic "police staff infrastructure" to serve this area during the first
year af annexation.
Street maintenance/street sweeping would be supported by "restricted" revenues such as gas
tax and Measure A funds. This would permit the current fevel of service to continue to be
provided to this area through a two-person City crew and by various maintenance contracts.
FISCAL SUMMARY
Anticipated expenditures needed to serve the Thausand Palms area at build out include, in
current doliars, a budget of $8.7 million for police services, nearly $4.0 million for fire/EMS
services, nearly $2.3 million far Administration and Cammunity Services, $0.4 million for Animal
Control, and $1.4 million for street maintenance. The General Fund operating budget totals
$15.4 millian, increasing to $16.9 million when street maintenance services funded by
"restricted" revenues are included (see Table Ill-D). The projected development at build out as
provided by the approved Berger Foundation specific plan, the proposed Messenger project
specific plan, and the County Genera! Plan for ail other areas, is estimated to generate at least
$32.0 miElion in building development fees for various capital improvements, far both the
annexed area as welf as in the rest of Cathedral City. Another estimated $29.0 million would be
obtained from the City's Development Impact Fees.
The Study shows that during the first year expenditures are projected to exceed revenues by
$61,289 (see Table Il-Fj. However, a revenue/expenditure balance can be achieved by delaying
the hiring of the second Police Sergeant for a short periad of time. Nonetheless, the
expenditures for serving this area are barely balanced by estimated revenues. Thereafter, as
shown in Table 111-C, the financial ability of the City to provide service ta Thousand Palms
improves significantly. As discussed in Chapter IIt, within five years {2017-18) there is a
projected surplus in current dallars of $1,196,Q45 and after 10 years the surplus would grow to
$2,656,259. By build out (projected to occur in 30 years but could patentially be longerj, the
projected surplus is estimated at $9,311,035. There are several reasons for this increased
surplus, including the immediate plans for the construction of a hotel near the I-10/Bob Hope
Interchange that will produce new Transient Occupancy Tax incarrte, followed by another,
larger hotel in that same area. A resort hotel is later planned near the Classic Club Golf Course,
followed by four travel hotels projected near two new I-10 infierchanges that are planned to be
canstructed in the 2020s and 2030s. Further, major retail is expected to be added in several
locations, particularly one that is part of an approved specific plan next to the Classic Club
hotel, as well as other areas in Thousand Palms.
POTENTIAL OUTCOME
Chapter II outlines the potential advantages and disadvantages to both the Thousand Palms
community and to Cathedral City should annexation occur. Adding undeveloped areas with
excellent future freeway access will expand the City's financial base and create a more fiscally
stable City in the long term, particularly as the unincorporated area develops. The Study found
that, initial{y annexation would enable the City to develop and preserve a basic police staff
infrastructure that could serve the annexed area while providing it with an improved level of
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City Cou�cil Study Session Report
March 27, 2d13
Page 4
service. Et would also enab(e the Police Department to stabilize its staffing and service structure
for both the existing city and the Thousand Palms area. Future revenues as the annexed area
develops would also permit fire service to improve in this area while also improving the overall
staffing and equipment infrastructure for the Fire Qepartment. The annexation wilf nat reduce
services, or the ability to provide these services to the City's existing jurisdictional baundaries.
The revenue/expenditure balance does initially appear to be negative, although it likely could
be a"wash" ar slight surplus if the City contracts with Cal Fire for fire/EMS service, and if police
s#affing is slightly adjusted during the first year of annexation. Chapter Ilf of the Study further
explains how annexation could be a financial benefit to the City.
There are a number of advantages to Thousand Palms community should the Cathedra! City
annexation occur. Same af these include improved police patrol with two police patrol beats
rather than the current one police beat, as well as the opportunity to provide public access to a
police service office in the Thousand Palms community. Once increased revenue from new
development occurs, fire service could also be improved to meet the national "2 in, 2 out"
standard far structural fires, regardless of whether the service is provided by City Fire or Cai
Fire. Access to City hall wauld be more convenient than to County offices in Riverside, thereby
providing residents more opportunity to attend meetings, serve on advisary boards, and access
land use and permitting information. There would be more oppartunity for residents to run for
local elective office as there are five council positions whereas there is only one supervisor
position. Possible disadvantages include an increase in the sales and use tax by $0.1 until 2015
and an extension of the Gity's Utilities User's Tax to Thousand Palms. There may, however, be
County assessments that would offset this.
NEXT STEPS
Without reservation, staff will proceed with the steps necessary for submittal of an annexation
application to LAFCO. This entails establishing zoning designations for all lands within the
potential annexation area through a pre-zoning process. The Riverside County-approved
specific plan zones will be retained far the Berger properties, and the zones that are established
through the City's current specific plan process for the Messenger properties will also be
retained. Current County zoning designations for the remainder properties within the Sphere
area will be retained by establishing parallel City zoning designations. A recommendation of
approval by the Planning Commission and a pre-zoning approval by the Counci! is required, If it
desired that the annexation process proceed at that time, the Council could adopt a resolution
to that affect and notice to all interested agencies would be given. ihe resolution and pre-
zoning, combined with an annexation application and associated fee of $13,800 would then be
submitted to LAFCO. Chapter 5 of the Study outlines the complete annexatian process.
Ongoing communications between the City and the Thousand Palms community continue
through participation in regularly-scheduled Community Council meetings, as well as
communication with the County Supervisor's office and property owners. Increased
communications with Cathedral City residents would commence with the annexation process.
ATTACHMENT
Ralph Andersen & Associates Draft Report, March 18, 2013 -Fiscal Analysis and Plan for Services for the
City of Cathedral City Sphere of Influence within #he Unincorporated Community of Thousand Palms
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CHAPTER 1-1NTRODUCTION .
Background .............................
Exhibit A ..................................
General Information .................
Why Change the Status Quo?.
Methadology ............................
Table of Cantents
.........................................................................................».......,...1
..................................................................................................................1
..................................................................................................................2
.................................................................................................................. 3
..................................................................................................................3
..................................................................................................................4
CHAPTER 11— FISCAL ANALYSIS — INITiAL ANNEXATION ..................................................................6
Revenues— intraduction ...................<......................................................................<..................................6
Revenues — Near Term (First Year) Projectior�s .......................................................................................7
GeneralFund Revenues ...............................................................................................................:...............7
PropertyTax Revenue ............................................................................................................................7
PropertyTransferTax .............................................................................................................................8
StructuralFire Tax ..................................................................................................................................8
Property Tax In-lieu Vehicle License Fee ...............................................................................................8
MotorVehicle In-lieu Fee ........................................................................................................................9
SalesTax ................................................................................................................................................ 9
Sales Tax Comp Fund (Property Tax in lieu nf Sales Tax) ....................................................................9
Transactionsand Use Tax (TUT) ........................................................................................................... 9
Transient Occupancy Tax (T07} ..........................................................................................................10
TimeShares ..........................................................................................................................................10
UtilityUsers Tax ....................................................................................................................................10
FranchiseFees .....................................................................................................................................10
Permitand Regulatary Fees .................................................................................................................10
BusinessLicenses ................................................................................................................................10
Finesand Forfeitures ............................................................................................................................11
Chargefor Services ..............................................................................................................................11
Intergo�ernmental Revenue ..................................................................................................................11
OtherMunicipaE Revenues ..........................................................................................................................11
SpecialAssessments ............................................................................................................................11
Useof Money and Property ..................................................................................................................11
Recreation Programs .......................................................................................................... .11
.................
RestrictedRevenue .....................................................................................................................................12
GasTax Funds .....................................................................................................................................12
MeasureA .............................................................................................................................................12
Total Restricted Road Revenues ..........................................................................................................12
Table il-A — Project First Year Restric#ed Road Revenues ..................................................................12
Revenue Summary ................................................................................................................
......................
Table (I-B — Project First Year General Fund, Other Municipal Revenue and
RestrictedRevenues .............................................................................................................................13
One-Time Revenues ...................................................................................................................................14
Tabie II-C — Building Development Fees — Cathedral City ...................................................................14
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Table il-D — Development Impact Fees — Cathedral City .....................................................................15
Expenditures — Near Term (First Year) Projections ...............................................................................15
Administration ..............................................................................................................................................16
PublicSafety ................................................................................................................................................17
PoliceDepartment ................................................................................................................................17
AnimaiControl ......................................................................................................................................18
FireDepartment ....................................................................................................................................19
FireService Cost ..................................................................................................................................21
Expenditure Summary .......................................................................................................... ......22
.................
Tabie II-E — Projected First Year General Fund Expenditures, Service to Thausand Pa{ms ...............22
Summary of Fiscal impact — Initial Year of Annexation ...............................................................................22
Tabie II-F — Summary of Annual Revenues/Expenditure, initiai year,
Proposed Thousand Palms Annexation ...............................................................................................23
Annexation Advantages/Disadvantages ...............................................................................................23
CHQPTER III — F13CAL ANALYSIS, FUTURE DEVELOPMENT INCLUQING BUlLD OUT
THOUSANDPALMS .....................................................................................................................26
Introd uctio n ............................. ...... ................. .... ........... ... ...... ....... ..................... .. .. ...... ... . .......... ...... ............ 26
Assumptions ..................... .................,..,,..........,............................................................... 26
.....................
PapulationsEstimates .................................................................................................................................28
Table III-A — Thousand Palms Population Projections Through Buifd Out ...........................................29
RevenueEstimates .....................................................................................................................................29
PerCapita Revenue ..............................................................................................................................29
7ransient Occupancy Tax/Time Shares ...............................................................................................30
SalesTax .............................................................................................................................................. 30
Non-General Fund Revenue .................................................................................................................31
7able III-B — Thousand Palms Estimated General Fund Revenue at Build Out ...................................31
ExpenditureEstimates .................................................................................................................................31
Table III-C — Thousand Palms Estimated Revenues/Expenditures at Bui1d Out ..................................32
Police....................................................................................................................................................32
AnimalControl ......................................................................................................................................32
Fire........................................................................................................................................................ 33
Adminis#ration .......................................................................................................................................33
CommunityDevelopment ......................................................................................................................33
CityClerk ...............................................................................................................................................33
PublicMaintenance ...............................................................................................................................33
Expenditure III-D — Thousand Palms Expenditure Budget at Build Out ...............................................34
Revenue for Capital Improvements .............................................................................................................34
BuildingDevelopment Fees ..................................................................................................................34
Table III-E — Estimated 8uilding Development Fees for Thousand Palms ...........................................35
DevelopmentImpact Fees (DI�} ...........................................................................................................35
Table III-F — Development Impact Fees for Thousand Palms ..............................................................36
Summary...............................................................................�--�--................................................................36
GHAPTER (V — P�AN OP SERVICES, COMMUNITY OF THOU5AND PALMS .........................................37
Background....................... ..............................,..............................................................................38
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Police Protection ..................................................................................................... ..39
...................................
CurrentService Provider .......................................................................................................................39
NewService Provider ...........................................................................................................................40
FireProtection .............................................................................................................................................42
Background...........................................................................................................................................42
CurrentService Provider .......................................................................................................................43
Map IV-1 — Fire Stations In and Around Thousand Ralms ...................................................................44
NewService Provider ...........................................................................................................................45
AnimalShelter/Control .................................................................................................................................47
Utilities.........................................................................................................................................................47
Water..... ........ ......... ................. ......................... .................... .............. ........... ................ .................... .... 47
Map IV-2 Coachella Valley Water District Boundaries .........................................................................48
Sewer {Wastewater} 5ervices ...............................................................................................................49
Drainage/Flood Control .........................................................................................................................49
Electricity............................................................................................................................................... 50
NaturalGas ...........................................................................................................................................50
SolidWaste Collection .......................................................................................................................... 50
Map IV-3 — Imperial Irrigation District Map ...........................................................................................51
MaintenanceServices .................................................................................................................................52
Street Maintenance/Street Sweeping ..........................................................................................
Lightingand Landscaping .............................................................................................................�--��-�-53
LeisureServices ..........................................................................................................................................53
Parksand Recreation ...........................................................................................................................53
LibraryServices .................................................................................................................................... 54
Schools........................................................................................................................................................54
Summary.....................................................................................................................................................55
Table IV-A — Thousand Palms Plan of Services ...................................................................................55
FinancialServices .......................................................................................................................................55
CurrentProviders ..................................................................................................................................55
NewService Provider ...........................................................................................................................55
CNAPTER V — ANNEXATION PROCESS .........................................................................................57
StepsToward Annexation ............................................�--............................................................................57
Cortese —Knox-Hertzberg Local Government Reorganization Act of 2000
Annexation/Detachment/Reorganization Procedure Diagram ..............................................................61
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Chapter I
Intr�duction
The purpose of this report is ko present a fiscai analysis and a Pian for Seroices for the City of Cathedra(
City's unincorporated portion of its Sphere of influence (SOI) (see Map, Exhi6it A). This fiscal analysis
and Plan for Serviees is designed to assist the City Council in deciding whether or not to initiate the an-
nexatian of this unincorporated area, generally known as the community of Thousand Palms.
The fiscal analysis identifies the financial impact any poten#ial annexatian will have on projected revenues
and expenditures required to serve this area, both in the shnrt term and at build out. The Plan for Ser-
vices is a requirement of Riverside County's Local Agency Formation Commission (�AFCO). It spells out
how uarious local services wifl be provided ta the Thousand Palms community, whether the current ser-
vice level now �eceived will be maintained or exceeded, how these services wili be financed, and whether
or not the area's infrastructure requirements will be adequately met. Togethe�, the fiscal analysis and
Plan for Services will provide the necessary dacumentation for the City to submit an annexation applica-
tian to LAFCO, if that is the decision and direction of the City Council.
Background
By way of general background, Cathedral City extended its incorporated area north of fihe {-10 freeway
several years ago. With the most recent annexation, the City adopted the North City Specific P(an which
is a comprehensive planning tool to guide development in this area.
The initial expansion of the SOI into the unincorporated Thausand Palms area (east of the City's jurisdic-
tional boundary north of I-10) resulted in the City's Sphere extending to Rio del Sol Road. The second
and most recent Sphere expansion taok in the remainder of the unincnrparated Thousand Palms com-
munity except for the majarity of fhe Thausand Palms area thai is covered by the Multiple Species Habi-
tat Canservation Plan and an area already covered by the Palm Desert Sphere.
Physical{y, as can be seen on the following map on Exhibit A, Thousand Palms is a mostly linear commu-
nity along the nartheasterly edge af the I-10 freeway from the easterly City iimits to just west of Washing-
ion Street. It consists of over approximately 9,700 acres, with an estimated population of 7,715� and is the
complete area being evaluated as part of this study.
Thousand Palms is an unincorporated, partially inhabited area, with a substantial amount of vacant land.
As indicated on the map shown on Exhibit A, it is bounded on the southwest by the 1-10 freeway, the City
of Cathedral City to the northwest, the Coachella Valley Multiple Species Habitat Conservation Area on
the northeast, and the Palm Desert Sphere of Inffuence (SOI) to the southeast.
Generally, the Thousand Palms c�mmunity features mostly residential development in the vicinity of the I-
10 freeway, Monterey Avenue and Ramon Road. There is also freeway commercial in this area, along
with a business park development. This part nf the community is served by a� elementary sch4ol, com-
munity center, library and park, as well as Fire Station 35. Nartherly there is scattered, but importani in-
dustrial development, including nearby surface mining. Running south along Varner Road toward "Palm
DeserY' Sun City are additional packets of residential development, along with the Classic Club Golf Facil-
ity and the private Xavier High School.
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On December 8, 2010, as part of the City's latest expansion of its SOI, the City Council gave direction ta
submit an application to expand the City's S01 to include the remainder of the Thousand Paims communi-
ty from Rio del Sol Road to just west of Washington Street. The unincorporated area from Rio del Sol
Road westerly to the Cathedral City limits was formaily placed in Cathedral City's SOI by the Riverside
County LAFCO in January 2Q12. This means that if the entire Cathedral Ci#y sphere area is ever annexed
into a City, it can only he annexed into Cathedral City. It also means that this cammunity is no# a candi-
date for incorporation as a city. While the City was interested primarily in annexing the area between Da
Vall Drive extended and Rio del Sol Road, the entire sphere area is being assessed far potential annexa-
tion because of the interest of the Thousand Palms community.
G-eneral Informatian
T.he City of Cathedral City was incorporated in 1981 in the heart of the Coachella Valley, located between
the cities of Palm Springs and Rancho Mirage. According ta the 2010 U.S. Census, the City consists of
22.9 square miles serving a population af 50,9052.
The City contains 17,047 households, wifh an average household size of 2.99. Because of this larger
family size, more families iive in this community compared to Palm Desert, as an example, which has an
average household size of 2.08. Cafhedra( City is known as a community diverse in ethnicity, income and
lifestyle, with white-collar and blue-coflar workers, professionafs and retirees claiming the City as their
home.
The Thousand Palms community wauld appear to reflect demographics more comparable to Cathedral
City than sorne ather valley cities. With 2,899 households and a population of 7,715, its average house-
hold size at 2.66 is more comparable to Cathedral City than, for example, Palm Desert, which as just
mentioned has an average household size of 2.08.
Currently, this community is served by Riverside County, which provides both police and fire/emergency
medical service, with water, sewer and drainage facilities maintained and operated by the Coachella Val-
fey Water District. Electrical service is provided by the Imperial Irrigation District. The Desert Recreation
District maintains and programs the community park and center, street lights and a major street median.
County Library Services operates a branch library next to the community center. Public schools are ad-
ministered by the Palm Springs Unified School District.
Why Change the Status Quo?
The cities along the I-10 carridor, such as Cathedral City, Rancho Mirage and Palm Desert, have histori-
cally focused an developing their cities southwesterly of the freeway. That changed, however, when Ca-
thedral City modified its SOI and annexed additional areas nartheasterly of the 1-10. Subject to the North
City Specific Plan, which was adopted by the City Council, this area is located northeasterly of the I-10
between Da Vall Drive and Palm Drive and has established General Plan and zoning designations for
high density residential and commercial development, {See Exhibit A).
Subsequently, Cathedral City requested an expansion of its SOI to include the entire 7housand Palms
community. This proposal was supported by the City of Rancho Mirage based on a Memorandum of Un-
derstanding (MOU) between the two cities. It was also supported by the Thousand Palms Community
Council, the Thousand Palms Chamber of Commerce, and the boards of the two country clubs in the
community.
7his support may have started based upon LAFCO's long standing position that Thousand Palms does
not have the resources to incorporate as a separate city. That created a concern among those living or
doing business in Thousand Pafms that the governance of the community would be fractured or split by a
partial annexa#ion af their community on the north by Cathedral City, coupled with the concern that Palm
Desert might attempt to annex the area ta the south. In other words, the Thousand Palms community po-
tentially could have been fractured with two or three entities governing portions of, and providing service
#o, their community (Riverside County, Cathedra! City, and Palm Desert). Since the community cannot
Z 201 a US Census
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incorporafe as a city, an apinion was expressed that the best option for retaining Thousand Palms' com-
munity identity and providing unified governance is annexation into Cathedral City. Further, the City can
provide a level of regulation which may be viewed as positive by the community and which some cases is
beyand that provided by the Caunty.
In addition, while current service ta Thousand Palms appears satisfactory, and effarts to maintain excef-
lent communication links between the publis and the County have been demonstrated, there could be
more direct input from residents in this community related to local services. Location of a City Police De-
partment Office at Fire Station 35, or in a community building pfanned near Bob Hope Drive and 1-1Q,
should improve local access to law enforcement. Having a larger role voting in Mayor and City Council
races as apposed to voting for onry one member of the County Board af Supervisors, should allaw more
direct involvement in local gqvernment by Thousand Palms residents. In any event, the Ciry may still want
to maintain the current Community Council if annexation does occur since this appears to be an excellent
means of receiving input from, and supplying infarmation to, the community.
In early 2012, the City of Palm Desert authorized a fiscal analysis report with a rapid turnaround to deter-
mine if it was economically feasible for them to consider annexation of two different areas northeast of the
City. The first area included the "Palm Desert" Sun City community, which is in the Palm Desert SOI. The
second area included the first area plus land extending northwesterly along the I-10 corridor into Cathe-
dral City's existing SOI. Obviously ttiis expanded area could not be annexed into Palm Desert without an
adjustment between the city's two spheres, which would require approvai by the Riverside County
LAFCO.
In any event, the study found that expenditures would exceed revenues for both areas, both in the near
term and at build out. As a result, there does not appear to be a current interest by the City of Palm De-
sert to either annex Palm Desert Sun City or seek to shrink Cathedral's Sphere in order to expand the
Palm Dese�t SOI. 7his issue, however, could be revisited in the future by the Palm Desert City Council.
!n additian, another reasan for Cathedral Cify to consider the annexation of Thousand Palms is to ensure
#he City's fiscal stability. It is projected that there will be substantial growth in the Coachella Valley in the
long term. With several valley communities nearly built out within their current city boundaries, and with
little or no room to expand, cities with more developable acreage could became more economically sus-
tainable over time. With traveler commercial and hotels plus business park land uses mostly focused at
freeway interchanges, the future development of interchanges at Portola (early 2020s) and Da Vall Drive
(early 2030s), could produce important loca! tax revenues if these areas became part of the City. Also,
there are pfans fnr significant high-end residential development along with commercial development and
a resort hotel in the Classic Club area which could generate substantial long-term revenue for the local
government providing service to this area.
If such an annexation proved beneficial to Cathedral City in the long term, there would be a correspond-
ing benefit to the service levels provided to Thousand Palms, since the City should be financially stronger
over time. Whether or not these economic assumptians or projections has merit, wil! be the subject of this
analysis.
Methodoiogy
The methodo)ogy of ihis sfudy incfuded reviewing documents and data supplied by the City of Cathedral
City, Riverside County, the Coachella Valley Wate� District, the Desert Recreation District, landowners
with development propasals and/or approvafs, LAFCO staff, and residents of the Thousand Palms com-
munity. This included financial, operational, land use, and procedural infarmation. Interviews were con-
ducted with the Cathedral City City Manager, Administrative Services Director, Community Development
Director, Planning Director, Palice Chief, former and current Fire Chiefs, Public Works Manager and Inter-
im City Engineer, along with the LAFCO Executive Officer, and the Cal Fire Assistant Chief.
(n addition, interviews were conducted with developer consultants to obtain information regarding the land
use plans of the Berger Foundation in the Classic Club area as well as plans by develapers near the in-
terchange at the I-10 and Sob Hope Drive/Rio del Sol Road.
A meeting was held with representa#ives of the Coachella Valley Water District to learn about utility ser-
vices to this area. Current zoning designations for the City's sphere were obtained from County Planning.
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Informatiqn was also provided by the County Executive Office, County Surveyor, County Auditor, Regis-
trar of Voters, County Library Services, and County Animai Control.
in order to more accurately assess the conditian of the streets and roads of the Thousand Palms commu-
nity, three voiunteer graduate students from Califamia State University, San Bernardino conducted a
"windshield survey° of these streets under the guidance of the lnterim City Engineer, Public Warks Man-
ager and the consultant. Detaiied data regarding these streets were abtained from Riverside Caunty.
Attendance at a meeting af the Thousand Paims Community Caunci! toak place, and a taur of Fire Station
35 was provided by a Cal Fire Battalion Chief.
7he methadology for projecting current and future revenues and expenditures as part of the fiscal analy-
sis in this report is based upon infarma�ion provided by the City and oiher agencies, as well as examining
the legal constraints on ciry revenues. Upon the advice of LAFCO staff, Riversid� Caunty's °Guidelines to
Rreparing Fiscaf Impact Reports," was not used as a guide for this report since apparently the guide was
prepared some years aga and has nat beert updated. Instead, elements af the general framework of the
consultant's capyrighted Fiscal lmpact of New Deveiopment (FfND Modei) and actual reve-
nue/expenditure analysis was used in projecting the fiscal impact of this possible annexation at build-out.
LAFCO staff indica#ed that their interest in the annexa#iqn is more in determining the financial and service
impacts on other agencies as well as the continuation of the current service leve(s to #he area proposed to
be annexed. The City, of course, is interested in the fiscal impact of any prospective annexatian on Ca-
thedral City.
Even though every effort has been made fo abtain the most accurate and precise information possible,
the estimated revenues and expenditures in this report are just that: estimates. They are calculated based
on information supplied by either City staff or other iocal agencies which serve the area. These are not
precise figures that guarantee actual revenues ar expenditures which will be received or expended should
the potential annexation occur.
f � ,i � ,f3iE'tiis
/
L'ity ��f �'tttJ�e�f�trl: ifY
�hapter II
Fiscal Ana�ysis — Initial Annexation
The fiscai analysis contained in tt�is Chapter presents the projected initial year revenues and expendi-
tures which wouid accrue to Cathedral City, if the Thousand Palms community were annexed #o the City.
Unless otherwise noted, these estimates are based on the City's actual revenues, with expenditures
based on the City's 2Q12-13 budget. This provides the most current "actual revenues," and the most the
most "realistic" expenditure base, as a result of the City's recent reduction in its expenditure plan.
Also discussed are one-time revenues which occur as a result of development. These one-time revenues
may accrue during the initia! year of annexafion, or later on as new developmen# occurs. This section is
applicable to the analysis in this chapter as well as the fnliowing chapter which presents the fiscal analy-
sis of this potential annexation at build out.
The fiscal analysis of the patential annexation is presented for the initial year of annexation in arder that
the City will learn the immediate impact the annexation w+ll have on the City and the affected unincorpo-
rated area. In Chapter III projected scenarios will be presented beyand the initial year until build out.
These projections are more uncertain since the timing of develapment and the recovery af the economy
are only educated guesses.
Revenues — Intraduetion
The projected revenues are presented in four categories:
1. income that will accrue to the City's Genera! Fund;
2. Other municipal revenue;
3. Restricted income such as street and road revenue; and
4. One-time revenues.
The Genera! Fund rewenues will include reallocation of property taxes per the Master Property Tax
Agreement with Riverside County, the shift of sales tax revenue to the City as well as other taxes and
fees that would apply to this area.
It should be noted that there are certain revenues which are not currentfy collected in ihousand Palms by
#he Caunty. These taxes, such as the Utilities Users Tax (UUT) and the City's limited-termed Transaction
and Use Tax {TUT), would be extended to this unincorporated area and are, therefore, included in the
immediate revenue projections contained in this report. The TUT, however, is not included in any revenue
projections past its current termination date in 2015.
it should be further noted that as a result of recent State action, City revenues have been shrinking. A
long-term revenue — Mator Vehicls in Lieu Tax — is now projected as producing zero revenue to ihe City,
both in its developed areas and in any areas tha# might be annexed to Cathedral City.
For lang-term revenue projections, it is assumed that existing and traditional revenue sources which are
currently funded wiil remain in pEace. It is impossible at this time to project which additianal municipal rev-
enue sources will be pilfered by the State.
In connection with expendiiures, the immediate term projectians will be presented based on estimated
actual costs to provide service. For example, just because the City's population bassd on the 2010 Cen-
sus would increase by an estimated 15°/a upon annexation of the entire Sphere area, certain basic costs
of city gavernment such as administration, city clerk, administrative services, planning, and other man-
agement and support services should nat increase by a like amount and should remain unchanged. In
other words, the current staffing and expense related to management and support services should be
sufficient to support the addition of the Thousand Palms area.
�t' F � �'f�; �
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On the other hand, police and fire/EMS service staffing expense will increase ta serve Thousand Palms.
These cost increases will be projected and included in the near term expense estimate. Much like devel-
oping the biennial city budget, actual projected revenues and expenses will be used to determine the �s-
ca! impact of this proposed annexation.
Revenues — Near Term (First �ear} Projections
7his section presents revenues that will be received by the City as a resuft of the possibls annexa#ion of
its unincorporated Sphere of Influence otherwise known as the Thousand Palms area. This section fo-
cuses on current and near term revenue projections, with longer term projections presented in the follow-
ing chapter.
As discussed previousEy, these revenues are presented in the following categories:
General Fund Revenues;
2. Other Revenues;
3. Restricted Revenues; and
4. One-time Revenues.
�eneral Fund Revenues
Property Tax Revenue
A one percent tax is applied to the value of real property is collected by Riverside County and is appor-
tioned to various agencies such as school districts, special districts, cities, and the County. When annexa-
tion of unincorporated property occurs, the affected city receives its share of the property tax revenue for
this annexed area.
The Master Property Tax Agreement betwesn Riverside County and the Cathedral City governs the shar-
ing of property tax when an area is annexed. The specific agreement between the County and Cathedral
City provides that the genera{ tax levy will be allocated as follows based on the praperty tax revenue re-
ceived by the County: the City receives 25% and the County receives 75%. This split appears to have
been established about 29 years ago, and was agreed to by the City approximately 23 years ago. Since
this formula may be out of date, it is unknown whether or not this appo�tionment of property tax revenue
could be or should be renegotiated.
In any event, this division of property fax income is net of the contribution to the Education Revenue
Augmentation Fund (ERAF), the County's administrative charge for collecting the property tax, and tax
exempt properties owned by other governmental agencies, such as Cal Trans, the Coachella Valley Wa-
ter District, the Desert Recreation District, the Palm Springs LJnified School District, and the County, and
tax exempt properties owned by charitable organizations. This latter categary includes, for example, 90.4
acres owned by Xavier High School and 245.3 acres owned by the Berger Foundation.
The property tax revenue presented in this revenue category does not include the Structural Fire Property
Tax, which is calculated separately.
The County Auditor calculated the prope�ty tax revenue that would be received by the City if Thousand
Pa1ms were detached and annexed to Gathedral City. This estimate was based an a legal description of
the area provided by LAFCO. The estimaied property tax revenue calculated by the County Auditor is
$817,000.3
There does not appear to be much new development occurring in Thousand Palms, so in the first year it
is assumed that increases in property tax revenue will be minimal. However, current preparation for de-
� Email from Chief Accountant, Property Tax Divisinn, Riverside County Auditor-Controller, dated June
19, 2Q12
�. 7 j e�t,�,j�
f��
t'ir� t�/'C�crrY��clral Cir�.
velopment activity in the northeast quadrant of the I-10/Bob Hope Drive interchange could lead to some
residential and commercial development in the near term.
Property Trans%r Tax
When new properiy is sold, or more likeiy in Thousand Palms when an existing property is resold, a prop-
erfy transfer tax of $1.10 per $1,000 of transferred value is levied on the sale of real property. The result-
ing revenue is then split betweert the City and Riverside County, with each obtaining $.55 of #he trans-
ferred value.
Actual Property Transfer Tax received by the Ciiy in 2008-Q9 was $121,282, increasing to $137,770 in
2009-10. It declined to $108,217 in 2010-11. Assuming approximately the same level of property sales in
the Thausand Palms area as in Cathedral City, it is estimated that the additional Property Transfer Tax
revenue from this annexed area in praportion #o the actual income received by Cathedral City in 2010-11
wiil be $16,408 (7,715/50,905 = .1516 x $108,217}.
lf the 2012-13 estimate for this revenue source is accurate, then the revenue from this tax would be
$22,740. However, to be consenrative in making financial projections, a figure based on the actual reve-
nue received in 2010-11 is used for ihis projection.
StructuraI Fire Tax
The City receives a Structural Fire Tax which must be used for the pravision of fire suppression and pre-
vention services. In 2010-11 the City received $470,237 from this source.
The tax is based on 5.87% of the one-percent property tax co(lected in an area. Based on calculations by
the County Auditor,4 ii is estimated that during the first year of annexa#ion Structural Fire Tax revenue
would be $341,000.
Note: This tax normally would be considered a"restricted revenue." However, it is included in this section
to achieve consistency with the presentation of this tax in the City's biennial budget. As a practical matter,
the revenue from this tax partially supports the Fire QepartmenYs budget which is a major part of general
City operations and which is othenuise supported by the City's General Fund. If upon the initial annexa-
tion, the City contracted with the Riverside County Fire Department (Cal Fire) to provide fire/EMS service
to the annexed area, this revenue would be used to partialiy fund that contract.
LAFCO staff advises after consulting with County Auditor staff, that, while the exact history of the struc-
tural fire tax in Cathedral City is not entire{y clear, it is likely the tax was transferred to the City around
1990 when the County changed the way it contracted ou# fire service, and the City began providing fire
service directly instead of the County, Apparently, subsequent annexations incorrectly assumed that the
master property tax agreements included the structural fire tax, even though the tax is not mentioned in
these agreements. ln any event, it would be prudent to update the master property tax agreement be-
tween the County and Cathedral City to reference the structural fire tax.
Praperty Tax In-lieu Vehicle License Fee
Instead of the City receiving property tax revenue from vehicles, it is reimbursed from a portion of the mo-
tor vehicle license fee. Unfortunately, this revenue source was permanently reduced by the State by near-
ly two-thirds in 2004. Still, the City received $3,469,471 from this source in 2010-11.
Assuming that the in-lieu VLF will increase in proportion to the increase in populatian upon annexation, it
is estimated tha# during the first year of annexation this revenue source would produce $525,972
(7,715/50,905 = .1516 x $3,469,471).
Motor Vehicie In-lieu Fee
ihe regular Motor Vehicle in-lieu fee produced $241,108 for the City in 2090-11. However, this revenue
source has been usurped by the State, with the result that the City will not receive any revenue from this
4 Email from Chief Accountant, Property Tax Division, Riverside County Auditor-Controller, dated June
19, 2�12
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source on an on-going basis. Therefore, the projected revenue from this source due to annexation will be:
$0.
Sales Tax
Without recounting the camplexities of the "triple flip" caused by state legislatian, fhe current sales and
use tax rate in Riverside County is 8.0%. The rate is aliacated as follows:
• State General Fund
• State Educa#ian Fund (Prop. 30)
« State Fiscal Recavery Fund
• State Local Revenue Fund (1991}
• State Loca1 Revenue Fund (2011)
• State Local Public Safety Fund
3.9375%
.25%
25%
.50%
1.0625
.50%
• City/County Local Tax 1.00%
• Riverside Co. Transportation Commission (Measure A) .50%
• Total Rate 8.00%5
This is a major revenue source for Cathedral City. The City received $4,929,695 in sales tax income in
2010-11, which is a significant reduction compared to the past several fiscal years due to the downturn in
the econamy. This estimate assumes that the Thousand Palms sales tax generators afe somewhat com-
parable to those in Cathedral City, after the car dealerships are eliminated from the retail mix. Assuming
the dealerships produce approximately one-third of the City's sales tax revenue, the remaining two-thirds
of the City's sales tax is projected on a per capita basis for Thousand Palms. ft is estimated that Thou-
sand Palms would initially produce $498,477 in sales tax ($4,929,695 x.687 x.1516). This formula uses
the City's sales tax income, times two-thirds, times the increase in population as a result of the potential
annexation of Thousand Palms.
Sales Tax Comp Fuad (Praperty Tax in liea of Sates Tax)
This is revenue received by the City as part of the State's 20Q4 "triple flip," where 25% of the City portion
of sales tax revenue was withheld, only to be backfilled the same amount from property taxes previously
allocated to schools. The amount received by the City in 2010-11 from this source was $1,642,658. As-
suming that a proportionate amount of this revenue wauld be produced from Thousand Palms, but again
discounting income from the car dealers, then the projected annuai income from this source would be
$166,101 ($1,642,658 x .667 x .1516).
Transactions and Use Tax (TUT)
In Cathedral City, Measure H was adopted by the electorate in June 2010 which established a 1% trans-
action and use tax on Ciry retailers. The revenue can be used for any genera4 city purpose. The tax, haw-
ever, expires after five years unless extended by the voters. Again, assuming this amount would be col-
lected in Thousand Palms at the same level as in Cathedral City, discounting income to the existing City
from the car dealerships, income from the TUT would be $297,346 ($2,940,612 x.667 x.1516). However,
as currently authorized, this income would cease in September 2015. Accordingly, while this revenue
source is included as income during the first year of projected annexation, it is not projected past 2015 to
the community's bui(d out.
One impact of this short kerm TUT is that it would temporarily increase the sales and use tax in Thousand
Palms. Current(y, the sales tax rate is 8.�0% in this community, and it would increase to 9.00% until Sep-
tember 2015.
Transient Occupancy Tax (TOT}
5 City of Cathedral Adopted 2012-2013 Budget, p. 27, with 25°!o added due to Praposition 30.
i � �t7�x�,
'"7
C'ity o�'Crrtfaead►•crr" Cit�
Effective January 1, 2Q07, the City's Transient Occupancy Tax {ToT} was established at 12% af the rent
charge for staying at a hotel, inn, or motel. There is one lodging facility in the Thousand Palms communi-
ty, the Red Roof lnn at 72215 Varner Road. This Inn has 116 rooms and its average room rate appears to
be approximately $7Q per night. Assuming an occupancy rate of 65%, it is estimated that the TOT income
produced from this Inn is an estimated $235,00� (rounded). In the future, both tourist and resort hotels
are planned to be constructed in this unincorparated area, and accordingly TOT income should become a
much more substantial revenue source over the near and long term.
Time Shares
The City also receives a small amount of revenue when applying the 12% TOT to timeshares (non-owner
stays). It is difficult to provide an estimate for this revenue source for the unincorporated Sphere area. For
the purposes of this report it is estimated that $0 will be produced upon annexation. This revenue source
will increase overtime, however, since the Berger Foundatian Plan includes 216 time share units as part
af their approved Specific Plan.
Utility Users Tax
Cathedral City adopted a Utility Users iax (UUT) in 2008. The rate of 3% is applied on the use of tele-
communications, cable, electriciry, gas, and solid waste. Assuming roughly the same level of utility usage
in the Thousand Palms community, it is estimated that additional income of $419,325 {2,765,996 x.1516)
would be achieved if annexation of this area occurred.
Franchise Fees
The City also receives franchise fees from the various utilities far the use of City streets and other rights-
of-way. Gas and electric franchise fees are 2% and cable franchise fees are 5% of gross receipts. The
solid waste hauler is charged 12% of gross receipts, while the transportation and towing franchise fees
are minimal.
The actual franchise fees received by the City in 2010-11 were $1,850,657. It is expected that the gross
receipts of these service providers will increase in proportion to the increase in population served if an-
nexation occurred. As a result, it is projected that the franchise fee income from the Thousand Palms
community would be $280,560 ($1,850,657 x .1516).
Permit and Regulatory Fees
Additional income will be produced from various permit and regulatory fees such as planning and zoning
fees, engineering fees, building permit fees, other processing fees, and code enforcement fees. These
revenues, hawever, basically only cover staff expenses necessary to provide the processing of various
permit applications or enforcement of code vialations. The revenues received and the resulting expendi-
tures basically should be a"wash." As a result, this report does not project any income from these reve-
nue sources, or any additional offsetting expenditures, for processing various permit applications, or for
code enforcement.
Business Licenses
The City requires business licenses for ali establishments conducting business within the City limits. They
are renewed annuaUy, The license fees are based on gross sales and the type of business being con-
ducted. Based on actual 2010-11 income of $420,510, and assuming a similar amount of business activi-
ty in the potential area to be annexed, the additional revenus from this area is estimated at $63,750
($420,510 x .1516).
Fines and Forfeitures
Fines and forfeitures reflect income generated by motor vehicle and Municipal Code fines, and other mis-
cellaneous fines and forfeitures. It is estimated that the City's actual income from this source will be
$352,766 for 2011-126. Assuming that the Thousand Palms community would proportionately generate
6 March 8, 2012 email from Administrative Services Director.
rf.i � �'�{„L
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about the same quantity of fines and forfeitures as Cathedral City, it is estimated that $53,480 ($352,766
x.1516) would be produced from this revenue source.
Charge for Services
In the City's 2011-12 budget, $3,131,112 is identified as income from charges for variaus services provid-
ed by the City. Many of these charges wouid not apply to Thousand Palms as net new revenues to Ca-
thedral City, since they are either charges which have offsetting expenditures such as plan check fees, or
involve the cost of police dispatch services provided under contract to the City of Desert Hot Springs.
There are some charges, however, which would apply to 7housand Palms, such as paramedic services,
code abatement, vehicle impounds, purchase of police reports, and fire inspections. These services
brought in $1,363,281 to City coffers in 2010-11. Assuming that the level of paramedic service, palice re-
ports purchased, and fire inspections will increase in proportion to the additional population served in
Thousand Palms, the additional income from this revenue source is estimated ta be $206,673
($1,363,281 x .1516).
It should be noted, however, that if in the initial year or years after annexation the City contracts with Cal
Fire for fire/EMS services, with the County providing ambulance senrice, this revenue category will be
reduced by $180,869 to reflect the absence of ambulance income. Under this scenario, the tatal income
from Charge for Services would be $25,805.
Tntergovernmenial Revenue
Most of the revenue in this category is not applicable ta the potential area to be annexed. This is because
most of this income was fram the City's Redevelopment Agency which no longer exists. As a result, the
projection for Thousand Palms for this revenue category is: $0.
(�ther Municipai Revenues
Other municipal revenues received by Cathedral City are discussed in this section.
Special Assessments
The City includes $3,115,214 in the 2011-12 budget for Special Assessment revenue, which includes
special assessment districts such as landscape and lighting districts. It is not expected that there would
be any special assessments accruing to the City from this area. Therefore, the estimated revenue fram
this source is estimated at: $0.
Use of Money and Property
It is not anticipafied tha# there will be an increase in the City's investment incame based on the annexation
of land in their SOI. However, there could be some limited income as a result of sign sales and aban-
doned property. As a result, the revenue from this source is estimated at $5,000.
Recreation Programs
The City does not pravide 'fee based' recreation programs, although in 2�10-11 the City received $5,000
in Soccer Park income. Any other fees for use of the park and community in Thousand Palms should con-
tinue to accrue to the Desert Recreation District, since the District is best able to provide services to this
area. Therefore, revenue for recreation programs is projected at: $Q.
Restric�ed Reveuue
Gas Tax Funds
Cities and counties receive a portion af the tax imposed on the purchase of gasoline. Revenues from gas
taxes are deposited into ihe Highway Users Tax Accaunt in the State's Transportation 7ax Fund. These
funds are then apportioned to cities and counties by the State ControEler. The distribution of this revenue
II � I'ra�e
i,i�y tif �t7i�tG'lFfii� Z,df�
is governed in large part by Streets and Highways Code Sections 2103 — 2107. Only counties benefit
from Section 2104 and only cities benefit from Section 2107.
If the Thousand Palms community were annexed, gas tax funds received by Riverside County, except for
Section 2104 funds, would shift to the City. Plus, Cathedral City would receive Section 2107 funds for this
area.
The revenue expected to be received by the City for Fiscal Year 2011 is $1,365,380.' While some sec-
tions of the Streets and Highways Code allocated gas tax funds by population and street miles, it is as-
sumed for the purposes of this report that the revenue from this source will be in proportion to the in-
crease in population as a result of the potential annexation of Thousand Palms. Using this method, the
gas tax funds for this unincorporated area are projected to be $206,992 ($1,365,380 x.1596).
iVIeasure A
From the County's 8.00% sales tax, .50% flows to the Measure A Fund for regional and local transporta-
tion projects. With these funds distributed by region, 24% of this money is distributed to the Coachella
Valley area. These funds are fuhher distributed with 50% devoted to State highway and regional road
projects, 35% for lacal streets and roads, and 15% for #ransit, such as Sunline Transit. It is further distrib-
uted to cities based on equivalent dwelling units (EDUs) (50%) and taxable sales (50%). Based on this
formula, Cathedral City should receive $998,000. This is 11.6% of the net funds available for distribution.
Assuming that the annexed area would receive a proportionate amount of fhis revenue source based on
its population, it is projected #hat $'151,29i ($998,000 x.1516} will be received from Measure A. This pro-
jectian is based on balancing the two variables which determine the amount of this revenue. It is assumed
that Thousand Palms proportion of EDUs is slightly larger than Cathedral City because of its slightly
smaller average household size, but that Thousand Palms has lower sales tax per capita.
Tota1 Restricted Road Revenues
The amount of restricted road revenues produced in Thausand Palms initially will be an estimated
$358,289. This data is summarized in Table II-A, entitled, "Projected Firsf Year Restricted Road Reve-
nues,"
Revenue Summary
The total General Fund, other municipal revenues, and restricted funds are summarized in Table II-B,
titled, "Projected First Year General Fund, Other Municipal Revenues and Restricted Revenues." This
information is useful in projecting the first year impact of the potenfiai annexation of the Thousand Palms
area, and to assist the City Council in assessing, along with projected first year expenditures, the imme-
diate fiscal impact of annexing this area.
' March 8, 2012 email, Administrative Senrices Director.
T? � �'<r�,>a,
.� i
� Gas $206,992
� Measure A $151,297
� Total First Year Restricted Road Revenues $358,289
C'i�� t�f C��tite���al City
� General Fund
� Property Tax
� Property Transfer Tax
� Structural Fire Tax
� Property Tax In Lieu of Motor Vehicle License Fees
� Motor Vehicle l.icense Fees
� Sales Tax
( Sales Tax Comp Fund
� Transaction a�d Use Tax
� Transient Occupancy Tax
� Transient Occupancy Tax (Time Share)
� Utility Users Tax
� Franchise Fees
� Permits and Regulatory Fees
� Business License Tax
( Fines and Forfeitures
� Charges for Service
� Intergovemmental Revenues
j Total General Fund Revenue
( Other Municipal Revenue
� Special Assessments
� Use of Money and Property
� Recreation Programs
� Total Other Municipal Revenue
� Total Avaitable for City Operations
� Restricted Revenues
� Structural Fire Tax (included in GF Revenue)10
Gas Tax Fund
Measure A
Total Restricted Revenues
� Total Tax Revenue Produced by Thousand Palms
$817,000
$16,4Q6
$341,00�
$525,972
$0
$498,477
$166,101
$297,346
$235,000
$0
$419,324
$280,560
$O$
$63,750
$53,480
$206,6739
$0
$3,921,089
$0
$5,000
$0
$5,000 �
$3,926,089 �
I
�
$206,992
$151,297
$358,289
$4,284,378
e As explained in the text, while permit and regulatory fees will produce income, it is expected that this
revenue will be offset by like expenditures. Therefore, neither the revenues nor expenditures from #his
ac#ivity are presented in this analysis,
9 If the City decides initially to contract with Cal Fire for firelEMS senrice, this revenue source will be re-
duced to $25,$05, since the City will not receive income from its ambulance operations. This would re-
duce the total available for City operations fo $3,745,221 and the total tax revenue produced by Thou-
sand Palms to $4,103,510.
10 Projection included in the General Fund revenue summary.
13 ; I'ra���,
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C)ne-Time Revenues
As expfained earlier in this chapter, the City wili receive one-time revenues as the result of new develop-
ment when an applicant seeks an entitlement or permit for land development and for the construction of
residential, commercial, or industrial property. These revenues are in the form af building development
fees and development impact fees. These revenues, of course, are not included in the on-going revenue
projectians, which support on-going municipal services, because they are restricted and only occur one-
time. They are restricted in that they can only be used for a specific purpose as authorized by City Coun-
cil resolution or ordinance, based on state law. These fees, or sometimes in the case of parks and land
dedication, are usually collected when the building permit or other entitlement permit is issued.
This section is presented at this point in the report since these one-time revenues can occur during the
initial year of annexation, and during the period of time required to build out this unincorporated area.
Many of ihe Suilding Department fees are collected to offset the City's processing costs, such as fees for
plan checks, microfiche, building permits, grading permits, and permit issuance. Generally, these fees are
offset by the cost of processing these permits.
Other building fees a�e for specific purposes such as fees for police, fire, facilities, and signalization, the
master undergrounding plan, transit development fee, park fees, art in public places, and maintenance of
the Genera! PEan. These fees which accrue to Cathedral City and how they are determined are listed in
Table II-C.
Excluded from this list are fees which are collected by the City on behalf of other agencies such as sup-
port for the Caachella Valley Multiple Species Habitat Conservation Plan ($5,730/acre for cammercial and
industrial developmentj, the Transportation Uniform Mitigation Fee (Tt1MF} collected on behaif of the
Coachella Valley Association of Governments, and the Strong Motion lnstrumentation Program which is a
tax imposed by the State of California.
Listed below in the following Table are the City's building development fees, including a brief description
and a summary of how each fee is calcuiated.
( Police, Fire, Facilities, and Signalization
� Master Undergrounding Fee
� Transit Development Fee
Park Fees
� Art in Public Places
� City Facility Impact Fees
$15Ql1,000 square feet or fraction thereof of all development
$.15 per square foot of roofed area for all development
$5.00/linear foot of frontage on maior arterials
Number of dwelling units (DU) x avg. # of persons per DU x 3
acres per 1,(l00 residents x fand cost per acre = total fee��
1% of 90% of building valuaiion for buildinqs over 15,000 sq. ft.
$1,859/residential unit; varies per acre for commerciai�ndustrial
The park fees are based on California Go�ernment Code Section 66477 {Quimby Act). Under this Act the
City is authorized to require eiiher the dedication of parkland or the payment of fees in-lieu of such dedi-
cation, or a combination of both, for every residential land subdivision. These fees are paid into the City's
Park Acquisition and �evelopmeni Fund which can be used only for the purpose of acquiring, building,
improving, expanding, and/or developing city parks. These fees are separate from Park Development Im-
pact Fees listed in Table IC-D presented below.
In addition, the City collects deveiopment impact fees, usually at some step during the entitlement pro-
cess, such as when a subdivision is recorded or a building permit is issued. These fees are authorized in
accordance with Government Code et. seq. (1987}.
The devefopment impact fees can only be used for the purpose for which they are caUected under state
law and the City ardinance authorizing these fees. Also, for certain required public imp�avements, a de-
veloper can obtain fee credits by building a park, for example, in advance of its normai development
schedule.
" For the purposes of Quimby Act or park in-lieu fees the City currently uses the average number of per-
sons per DU of 3.03.
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Cathedral City has two sets of develapment impact fees, one for the existing developed City, and the oth-
er to suppork the North City Plan. Since North City is mostly vacant land, same of the fees are substantial-
ly higher than for the rest of the City since basic infrastructure such as roads and bridges need to be con-
structed in this area. For the purposes of this analysis, and since Thousand Palms has most of its basic
infrastructure installed, the fees charged in the developed portian of the City are used in projecting devel-
opment costs in this cammunity. They are presented in Table II-D, entitfed, "Development Impact Fees —
Cathedral City".
Resident'ral ftetail Commerciat Non-netan commer- �
Faci[ity j cial lndustrial
($JUnitj ($tAcre ($/Acrey
� City Yard Nehicle Stora9e} $95 $587 $454
� Police Community Center $21 $132 $102 �
� Public Safety 7raininq Site $18 $110 $85
� Interchange an Bridqes I $86 $4,145 I $1,500 (
I Unpaved Trails [ $53 $173 I $134 �
� Parks, Communitv Center, Pools f $1,577 i $5,141 j $3,973 (
Again, these impact fees will be collected at subdivision recordation or building permit issuance, and can
onky be used for meeting the facility needs caused by future growth. These fees are estabfished based on
the policy that "growth shoufd pay for itself' and not be subsidized by the existing property and business
owners in the City.
When the fees are received, they are placed in sepa�ate funds and not comingled wiih other city general
fund or restricted revenues. Furkher, the funds are normally budgeted and spent on public works projects
administered by the City. Mowever, funds collected for interchange and bridge improvements are normally
used for prajects administered by the State or the local Council af Governments. Regarding development
impact fees collected for parks and related improvements, and park fees cnllected as part of the bui(ding
development fees, the City should coordinate with the Desert Recreation District in planning and spend-
ing these revenues if the Thousand Palms area is annexed. This is because it is iikely that the District wiil
continue ta provide, maintain and operate park improvements post-annexation.
Expenditures — .�Tear Term (First Year} Prajections
The purpose of this sectian is to present and evaluate the initial expenditures needed to provide services
to the Thausand Palms area, if annexed into Cathedral City. It is assumed that the level of service will be
the same or better than the area receives now and wili be at least at the level provided to the rest of Ca-
thedral City.
The cost projections contained in this section are for the first year of annexation. This will allow the com-
parison of these expenditures with the lafest "actual" revenues discussed earlier in this Chapter. This
comparison is designed to provide the City Council the data needed to assess the initial financial feasibil-
ity af pursuing this potential annexation. This cost information will also be the basis for projecting long-
range expense in providing service to this area at build out, which is information LAFCO requires to be
included in the Plan of Services for this area. This {after information is presented in Chapter III of this re-
port.
The first-year expense projections are not necessari(y based on a cost formu(a, such as automatically
increasing expenses solely using the City's projected General Fund expenditures on a per capita basis.
The expenditure estimates used in this report are based on projected actual costs to prnvide service. So,
for example, even though there wil( be a larger city to serve, there should be no increase in the City Man-
ager's or City Attorney's budget. While there may be some additional work load experienced in these of-
fices, it is not enough to justify an increase in the City's budget for these functians. On #he other hand,
there will be additional expenditures needed fo provide police and fire service.
Also, as explained earlier in this Chapter in discussing revenues, there are certain expenditures, such as
building and plan checks, which are offset, or shauld be offset, by fees. For the purpose af this analysis,
neither revenues nor expenditures for these activities wilf be presented in this report.
,� � 1 i � �'cr;� L
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ln the following paragraphs each part of the city organization will be discussed. Those departments or
offices, which have no expected additional operating expenses upon initial annexation, will be discussed
briefly, while those departments which will have expenditures increases wiil be discussed in more detail.
Administratian
If annexation occurs, i# is not expected that there wili be a need to increase the budgets for the City
Council, City Attorney, and City Management, including marketing. It is alsa assumed that, while there
will be somewhat more risk assumed with additional street miles, the current budget for Risk Manage-
ment will be sufficient. It may be speculated ihat there wauld be more risk to the City by adding more fire-
fighters and police o�cers. However, because o# the recent reductions in existing Ci#y staff, the increase
in staff ta serve the annexed area initially will not likely be significant enough to increase this part of the
budget.
There will be an additional expense for the Cify Clerk's Office for the provision of elections every other
year. There are 11 precincts in the Thousand Palms, which usually translates into two to three voting pre-
cincts. Based on 2,778 registered voters in this area, the County Registrar of Voters estimates that the
City will experience additional election expense of $7,000 per election every two years.'Z
In addition to the regular election cycle, special elections could be scheduled. However, these extra costs
are difficult to project since the frequency of special elections is unknown. They will need to be budgeted
on an ad hoc basis, if and when special elections are cailed. For the purposes of this fiscal analysis, only
the normal election expense is projected far anticipated regular elections. On an annual basis, it is esti-
mated that there would be an additional yearly cost of $3,500.
In addition, either through the Cierk's OfFice, Administrative Services, or Community Development, limited
staff support for the Thousand Palms Community Council is provided, assuming that City will continue this
organization as an advisory body to the City Council. While there will not be any additianal expense for
various staff providing liaison and information to the advisory council (palice, fire, code enfarcement,
planning, etc.), funds for part-time assistance to schedule meetings, prepare minutes and other clerica(
suppart in the amount of $5,000 is budgeted far this function. For the purpose of this report, these funds
are included in the Clerk's Office budget.
In the Administrative Services Department, there will be an additional work load for Human Re-
sources and Finance, but not to the extent where additional expense should be budgeted initially for
these functions. While there could be an additional expense for Management Information Systems to
extend data and telephone services to Fire Stetion 35 and to the community center, there should be no
expense in the beginning, if initial fire service ta this area is continued to be provided by Cal Fire, and the
recreation programs continue to be provided by the Desert Recreation District as contemplated by the
Plan of Services. As a result, no additionai expense is projected for the Administrative Senrices Depart-
ment upon initial annexation.
While there fikely will be additional permit and entitlement processing in the Planning, Building, and En-
gineering Divisions of the Community Development Department, the expense of this work should be
offset by fees and absorbed by existing staff given the overall decline in building and devefopment activity
in the Valley. As expfained above, neither potential income nor expenses from p(anning, building, and
engineering activity because of this annexation are included in this analysis.
As a side note, the pracessing of development plans through Planning, Building, and Engineering should
be more convenient to those living in Thousand Palms if the annexation occurred. In effect, the level of
service to the public should improve. Meetings of the City Planning Commission and City Council, for ex-
ample, take place at the nearby City Hall in Cathedral City. It is currently necessary for those interested in
devefopment issues in unincorporated areas like Thousand Palms to attend meetings of the County Plan-
ning Commission and the Board of Supervisors in the City of Riverside.
In terms of day-to-day development activity, the County has a planning and development affice on Wash-
ington near Palm Desert Sun City. Whife this location is more convenient for those in living in Thousand
Palms, there have been substantial staff reductions a# this o�ce this past year due to a major reducti4n in
12 Email, Riverside County Assistant Registrar of Voters, May 29, 2012.
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development activity in the Vailey. While this a�ce still maintains a fuil-time counter persan on a 4/10
work week to accept develapment and building plans, these plans must now be sent ta Riverside for pro-
cessing. So, for example, if an individual has submitted building plans which have been reviewed with
corrections or other issues, that individual must travel to Riverside to review and discuss the corrections.
Therefore, as a general rule, processing land use and development issues in Cathedraf City should prove
more convenient for those living in Thousand Palms.
At this same location, the Gounty still maintains Code Enforcement offices. Currentiy, these offices ap-
parently are fully staffed, or nearly so.
It is assumed that there will be no increase in the Community Organizations portion of the City budget.
This is the portion of the budget which supports the Chamber of Commerce, Bays and Girls Club, and the
senior center.
Public Maintenance is responsible for street maintenance. While unlike most of the other expenditures
discussed in this section, the budget for street maintenance is suppo�ted by two restricted revenues; gas
tax and Measure A funds. Between these two revenue sources, the City expects to receive $358,289 to
support street maintenance and fihe maintenance of traffic signals. Street lights, and the landscaped me-
dian on Ramon Road, are funded by a local assessment district which is administered by the Desert Rec-
reation District along with their maintenance of the community park. Street sweeping is provided through
CVAG grants for major arterials and waste systems provider, Burrtec provides monthly residential street
sweeping as part of its contracf with the City.
The City wilf pay for maintenance of the traffic signals and devote 2.0 FTE street maintenance workers
and contract service to provide street, signal and sign maintenance in Thousand Palms.
The initial budget to provide street rr�aintenance to Thousand Palms is $358,289.
Public Safety
Police Department
Thnusand Palms Calls for Service (CFS) data was analyzed based on the Sheriff s Records Management
System. In 2Q11, the Sheriff's Department reported 4,232 CFS, in 2010 the number was 4,028, and in
2009, it was 3, 874.
The crime daka is not broken down by Part I and Part ll crimes since the County SherifYs Department as-
sembles this data based on the entire unincorporated area within the Palm Desert station patral area.
However, the Captain in charge of this area observes that the major law enforcement issues in this com-
munity involve crimes against property (burglary, theft, and vehicle theft) and drug related offenses.
The response time gaals provided by the Sheriff to this area are:
. Priority 1 calls > 5 minufes
• Priority 2 calls > 10 minutes
• Priority 3 calls � 15 minutes
This compares to Cathedrai City where their actual response times are:
• Priority 1 calls > 5 minutes
• Priority 2 calls > 8 minutes
• Priority 3 ca11s > 10 minutes
Another factor in analyzing law enforcement service far the community is the geographical length of the
area being served, and the fiact that currentfy the developed part of Thousand Palms is separated physi-
cally fram the developed portion of Cathedraf City, which is served by the City Police Department. Since
maintaining adequate response times in reacting to serious crimes is an important law enforcement ob-
jec#ive, providing a sufficient number of officers in the community to accommodate that response is es-
sential.
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To provide this service, it is proposed that two officers be assigned to this area 24/7, each assigned to a
separate beat. This wfl! provide immediate backup for each officer assigned to 7housand Palms without
waiting, potentially for several minutes, far a beat officer or a cover car to respond from the developed
part of the City. To staff two officers 24/7 will require the addition of nine police afficers at a cost of
$1,342,818.
In addition, it is proposed that the coverage of one Sergeant be added during the time of heaviesi cal( for
service volume in Thousand Palms. This would require adding twn Sergeants positions at a cost of
$427,634.
It is also proposed that one .75 FTE Detective be provided at a cost oP $119,350, a Records Clerk at a
cost of $86,673, and a.5 FiE Dispatcher at a cost of $47,851 be added to #he Police Department to
serve the Thousand Palms community.
The total cost of providing police staff to Thousand Pafms is estimated at $2,024,327. Two new, fully
equipped patro! cars will need to be purchased at a total cost of $116,000. Since a"sinking fund" or
equipment rep(acement fund is not established for vehicfes needed for Thausand Palms, these patrol
cars can be purchased through a five year lease-purchase agreement at an annual cost of $23,200. The
total cost for pofice services, including staff and vehicles, is estimated at $2,047,527.
The officers and staff will be deployed from the Cathedral City Aalice Station. In terms of providing access
to police and support staff in Thausand Palms, one option as part of the Plan for Services (Chapter IV) is
for the Police Department to use an office in Fire Station 35 for repo�t writing and for meeting the public.
This fire station is oversized, and has the space for a small o�ce for use by the Police Department. As an
alternative, the Police Department could explore using space at the Thousand Palms Library for report
writing onCy as is the current practice of the Riverside County Sheriff's Department. A third possibility, and
possibly the best ultimate option, is to (ocate an office in a community building proposed to be constructed
as part of the SOC Ventura, LLC development at the northeast quadrant of the I-10/Bob Hope Drive lnter-
change (Messenger Project). Over time, it may turn out that other developers in the area would want to
consider donating space for a poEice office located in Thousand Palms.
Assigning the Records Cferk #o Fire Station 35, or to the proposed community building in the SDC Ventu-
ra, LLC development, for part of the wark week could facilitate service to the pubiic. TF�e Department
would also continue to suppor� the senior volunteer program called, Citizens on Patrol, which has an of-
fice in the Tri-Palms community.
It would appear that annexation of this area would provide an improved law enforcement service level to
the community. This is because there will be two police beats assigned exclusively to Thousand Palms.
This compares to the current law enforcement provider where only one police beat is assigned exclusive-
ly to this area. Also, measured by the number of officers per 1,000 population served, the number of of-
ficers assigned to Thousand Palms would double.
Also, the current closest public access for !aw enforcement is afi the Sheriff's Palm Desert subsfation.
There is the opportuniry to pravide limited public access for meetings, interviews, and inquiries by loeating
a Police Department Office at Fire Station 35, or eventually in the proposed development near the
I-10/Bob Hope Drive Interchange.
Animal Cantrol
Cathedra! City contracts for animal control services through Riverside Couniy. ihey provide service from
a shelter which serves the Coachella Valley at 72-050 Pet Land Rlace in Thousand Palms. Services in-
clude field services as well as shelter and adoption services including licensing and vaccinations_
The County Animal Control will charge Cathedral City $229,128 for these services in the coming fiscal
year. This includes a,5 FTE Animal Control Officer (ACO) for field services and for Shelter Services.
County Animal Control provided a cost estimate for senring 7housand Palms of $108,619, net of $3,500
in revenue.'3 While the cost of shelter services seems in proportian to Cathedral City's population
($25,000 vs. $146,132) and seems reasonable, charging the same amount for Field Services for both
areas daes not.
'3 Emai(, Deputy Director, County Animal Control, July 10, 2Q12.
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The City indicates that they have not seen an increase in complaints by reducing the Field Services costs
to the levei of a.5 FTE ACO serving approximately 51,000 peopie. Requiring a.5 FTE ACO for a com-
munity of 7,715 does not appear reasonable. Of course, this report is not developing an exact contractual
expense for the purposes of the actual provision of services to this area. It is only offering an estimate of
what thesa costs will likely be initially if Thousand Palms were annexed by Cathedral City. Accordingly,
the estimate from Animal Control is being reduced to reflect the services of a.25 ACO plus the amount
required far Shelter Services. By making this adjustment, the estimated cast for Animal Control service in
the first year of annexation is $70,483.
Fire Llepartment
Provision of fire service to the Thousand Paims area is a more complex issue than the provision of law
enforcement services. This is because the Riverside County Fire Department, under contract with Cal
Fire, not only provides a response to fire and emergency medical cafls to the immediate Thousand Palms
community, but to all of khe incorporated and unincorporated areas of the Coachefla Valley, except the
cities of Palm Springs and Cathedra! City.
Cal Fire provides immediate fire suppression and EMS response to Thousand Palms from Fire Station 35
with a Type I Engine, staffed with thrae firefighters (3 — 0 sta�ng}. This engine responds to calls for ser-
vice to ihousand Palms, plus portions of the cities of Palm Desert and Rancho Mirage. They also provide
regional support to their entire service area from this station, including a Breathing Support Unit. Cal Fire
is also considering moving their HazMat unit from Fire Station 81 in Bermuda Dunes to Thousand Palms.
Fire Station 35, loca#ed at 31920 Robert Road, is a relativeiy new, oversized station. It became opera-
tional November 1, 2009, and has approximately 9,100 square feet. It has three large garage bays which
can accommodate up to six fire apparatus. It also has office space, an exercise/weight room, a spacious
day room which includes a kitchen, dining, and TV areas, which are connected to an outdoor dining patia.
It also has two separate living areas which can accommodate two fire crews.
There are several options for providing fire and emergency medicai service to Thousand Palms if it were
annexed into Cathedral City. Option #1 would involve the City Fire Department rnoving a Type I fire en-
gine, along with an ambulance, into Fire Station 35 and providing service to Thousand Pa1ms and poten-
tially the periphery of the surrounding cities through mutual or automatic aid. At times when both appa-
ratus are available, this could provide appraximately the same level of service to Thousand Palms in
terms of respanse times currently provided by Cal Fire, if an e�cient protocol far providing mutual or au-
tomatic aid were able to be implemented. Also, Cathedral City would likely provide ambuEance service
rather than through the County service pro�ider. These rights authorize Cathedral City to supply ambu-
lance service within their City limits.
Having both a fire engine and ambulance each staffed with two firefighters ar fighter fighter/paramedics,
would mean that, based on the experience in Cathedral City, for about 7D% of the fires the City could re-
spand with four firefighters, rather than three. This would meet OSHA's "2 in, 2 out" rule, and would allow
for better initial response during the first critical few minutes in responding to a structural fire. However, in
at feast 30% of the cases, the initia( respanse would only be with two firefighters, which would require the
arrival of a second unit before two firefighters can enier a burning structure, with two firefighters remain-
ing outside. In those cases, Cal Fires' service level would be better than the City's at the point of initial
attack (3-0 staffing). It should be noted that Cathedral City Fire is currently exploring achieving 3-0 staff
ing on their engines which is the same as Cal Fire, and would be an improvement in the City's current
response pattern.
The City could also respond with three or four firefighter/paramedics ta major medical emergencies for
most, but not all, incidents. This is superior to the current initial response of one fiire engine with three fire
staff, including one paramedic, since serious emergencies require four or more paramedics or EMTs to
handie all of the duties at such an emergency. It should be noted that all but four Cathedral City firefight-
ers are paramedics, and that all new hires are firefighter/paramedics.
Option #2, and the best option per the analysis af this report, would envision Cathedral City contracting
with Cal Fire for fire service, with Cal Fire operating from Fire Station 35 as is currently the case. The City
may not initially support this option since it would lose an opportunity to enlarge and improve their De-
partment's operation with additional staff and apparatus. A further reason for not supporting this option is
that the City might not be abie #o pravide ambulance service with firefighter/paramedics with anothe�
agency providing fire service. Due to the lack of initial financial resources to support the City Fire Depart-
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ment at the beginning af praviding service to Thousand Palms and severai years thereafter, the City will
need to contract with Cal Fire in order to balance revenues and expenditures in providing this service to
Thousand Palms until future development occurs.
Option #3 is to develop a Plan fpr Services (Chapter IV) whereby Cal Fire would provide fire service un-
der Option #2 for a number of years, with the Cathedral City Fire Department and Cal Fire eventually
sharing Fire Station 35. The station's apparatus room certainly has significant capacity as pointed oui
above. There is enough room for a City Type I fire engine, or a ladder truck, if that proves to be the best
configuration of apparatus, especially with the high value, mid-rise Aqua Caliente Casino and Resort
nearby. There is also more than enough space for an ambu{ance and one or more Cal Fire apparatus.
Whether or not co-location of City and Cal Fire aperations would otherwise be feasible, would be dis-
cussed and/or negotiated sometime in the future. This likely would be several years (10 — 15 years) after
initial annexation before this discussion would be needed given the inadequacy of the structural fire tax in
Thousand Palms to support basic fire service for either the City or Cal Fire.
Regarding the location oP ladder trucks, there is one at Cal Fire's stations 33 (Palm Desert) and 86 (In-
dio). With the Aqua Caliente Resort close by, the two agencies may wish to collaborate ko determine the
best configuration of apparatus to serve not only the Thousand Palms community, but the surrounding
area as well, including portions of nearby Rancho Mirage and Palm Desert. Further, since in the recent
past, Gal Fire closed the North Palm Springs fire station, that agency may wish to re-evaluate the canfigu-
ration af the stations they staff and where their apparakus should be located, if this annexation occurs.
It has been mentioned that Fire Station 35 also has a large living area. There are two separate living
quarters at this station which could accommodate a crew from each agency. Since Cathedral City has two
staff on each apparatus, these four firefighters can be considered one crew far hausing purposes. Each
wing has four rooms, with three of them currently used as bedrooms, with two bunks in each bedroom.
With this optian, Cal Fire's regional operations should not be disrupted, and service to Thousand Palms
should be at ar a be#ter level of service as the area currently receives. Thraugh joint operations, and pos-
sibly through automatic aid ar a boundary drop, the perimeter portions of Rancha Mirage and Palm De-
sert closest to Fire Station 35 could still receive the same level of fire response, subject to resolving dis-
patch issues between the two agencies. C{early, the two fire agencies would need to cooperate in devel-
oping a successful implementation plan for this third option to succeed. Further, these issues wifl not
need to be resolved likaly for another 10 — 15 years.
A variation of this option, if the City concludes it cannot subsidize ambuEance service to Thousand Palms,
is to provide fire suppression response, but continue with the current ambufance service provider. This is
because the projected cost of staffing the ambulance exceeds the collection of an estimated $180,868 in
offsetting fees. This will eliminate the benefit of having faur firefighters responding to most fires and medi-
cal emergencies from Fire Station 35. In fact, the Isvel of service in Thousand Pafms would diminish since
the City only staffs its engines with two firefighters, therefore this variation is not recommended.
Whether #here would be an issue of the Ciiy losing its rights in providing ambulance service in part of the
City, but not in the entire City, is not analyzed in this report. As an observation, however, it would appear
that the City can stiil maintain the chain of the City's authority for providing ambulance service as long as
it controls this service either by directly providing that service or by cantract.
Another fire facility immediately adjacent to Fire Station 35 is the 12oy Wilson Training Center, jointly op-
erated by Cal Fire and the College of the Desert. (t has an estimated 9,000 square feet. According to Cal
Fire stafF, this training facility is aperated separately from Fire Station 35. The Plan of Services antici-
pates, therefore, that there would be no change in the operation of this fire training facility if the Thousand
Palms area annexed to Cathedral City. Therefore, there would be no additional cost for operating this fa-
cility as a result of this proposed annexation.
Fire Service Gost
For the City to provide fire service to Thousand Palms will require four Firefighters/Paramedics, including
two person staffing for the Type I engine, and two firefighter/paramedics to staff an ambulance. To staff
these two units 24/7 will require three Fire Captains, three Fire Engineers and six Firefighter/Paramedics.
The cost of this staff is calcula#ed at top step salary plus benefits. Administrative overhead is not in this
cost since it not expected to increase as a result of this additional staffing. The estimated cast of the 12
fire staff is $2,019,384,
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There will be no need ta purchase an ambulance, since the City has a spare, ar a front line ambulance
which is now in reserve. Also, the City is purchasing a new Type !-engine which is expected to be deliv-
ered in April 2013. At that time a current front line engine will become a reserve engine. No funds are
budgeted for apparatus in the initial year of annexation if the City provides direct fire service to Thousand
Palms since it is assumed thai either an existing apparatus will be transferred to Fire Station 35, or that
orte wiil be obtained th�ough a grant. If there is a need to purchase an additional Type I Engine in addition
to the one which will arrive in April, the City could purchase this apparatus through a 15-year lease pur-
chase agreement from the supplier, which would even out the cost of such an acquisifion over the life of
the engine. It is estimated �hat additional annual cost for the purchase of a new, fully equipped Type I fire
engine using this type of financing mechanism based on a recent quote provided to another California city
is approximately $45,oaa.14
Initially however, since it appears that there is only a marginal revenue stream to support this Cevel of ser-
vice, the City should contract with Cal Fire for firelEMS service, with ambulance service provided by the
current Caunty pravider. This would mean that, while the City would not receive paramedic service in-
come, it would save money by contracting with Cal Fire. The estimate for a Type I fire engine staffed with
three firefighters, including overhead and equipmenf is $1,550,000.�5 This includes the administrative
charges charged by the State as well as an "engine use agreement" which funds the use and replace-
ment of ail apparatus. Adding an operations and maintenance expense of an estimated $30,000,16 the
total projected first year cast for contracting with Cal Fire is $1,680,000,
In summary, the options for praviding fire/EMS service to 7housand Palms include:
1. Option #1.The provision of fire/EMS service by the Cathedral City Fire Department from Fire
Station 35 with four firefighters or firefighter paramedics, assigned to two apparatus, provid-
ing service through expedited mutual aid or automatic aid.
2. Option #2. Prnvision of fire/EMS service by the County of Riverside Fire Department (Cal
Fire), with three firefighters, assigned tn one apparatus, under contract with the City during
the initial years of annexation.
3. Option #3. Provision of fireJEMS service by Cal Fire from Fire Statian 35, with the Cathedral
City Fire Department eventually providing fireJEMS service. When and if this occurs, the City
Fire Department would then likely be able to provide senrice with three or four firefighters or
firefighter paramedics assigned to a Type-1 engine, and two paramedics/EMTs assigned to
an ambulance. Service from this station to Rancho Mirage and Palm Desert could be provid-
ed through automatic aid depending upon resolving payment for service and dispatch issues.
City Fire and Cal Fire cauld co- lacate in Fire Station 35, with Cal Fire continuing to provide
regional fire service from this facility assuming that these other issues can be resolved.
It is strongly suggested, because of current revenue constraints, that Option #2 be pursued. Eventually
Option #3 could be considered if financial, dispatch and other issues can be resolved.
Expenditure Summary
Total projected General Fund expenditures are summarized in Table II-E, "Projected First Year General
Fund Expenditures, Service to ThQusand Palms." These expenditures, primarily to provide police and fire
services, are required to provide the same or better level of service to Thousand Palms as it currently re-
ceives, and is comparable to the service ievels provided in the developed portions of Cathedral City. In
the following table, the estimated expenses for the initial year after annexation, are shown with the pro-
jected cost for firelEMS senrice Options #1 and #3, which are the same, and for Option #2.
ServicelFunction ' `�`•"'�`"' "''"•,�`
� Fire Options #1 & 3 � Fire Option #2
14 Email, City of Morgan Hill, July 31, 2d12.
15 Email, June 26, 2012, Assistant Chief Cooley, Cal Fire.
�g Email, July 27, 2012, Assistant Chief Cooley, Cal Fire.
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City Council, City Attomey, City Manager
City Clerk (Elections)
Administrative Services (Finance, Human Resources)
Management Information Services
Community Development (Planning, Engineering, Building)
Animal Control
Patice
Fire
Total Generat Fund Expenditures
$0
$8,500
$0
$0
$0
$70,483
$2,047,527
$2,019,384
$4,145,894
$0
$8, 500
$0
$0
$0
$?0,483
$2,047.527
$1,680,000
$3,806,510
In addition, it is estimated that there will be an additional expenditure of restricted revenues (Gas Tax,
Measure A) in the amount af $358,289. This would mean a total operating budget of $4,504,183 for Fire
Options 1& 3, and $4,164,799 for the recommended Fire Option #2.
Service to Thousand Palms would mostly be provided by contract, especially if Fire Optian #2 is selected.
In that case, the City would add staff of 13.25 FTEs to the Police Department and 2.0 FTEs to Public
Maintenance, or a total of 15.25 FTEs.
Summary of Fiscal Impact — Initiai '�ear of Annexation
There have been numerous changes in the fiscal structure of California municipalities in recent years. Nat
only because of the economic downturn, but more importantly because of the steps taken by the State to
balance their budget on the backs of cities and counties, a significant reduction in revenue ta support lo-
cal services has occurred. The lass of redevelopment funds, the eliminatian oi the Motar Vehicfe in-lieu
tax, and the diversion of other local revenues to state coffers are recenf examples of major state takea-
ways. Plus the State con#inues to adopt legislative mandates on cities without providing the needed reve-
nue to implement these mandates as required by law.
{t is within fhis cnntext that the fiscal impact of the patential annexation nf Thousand Palms by Cathedral
City is being evaluated. This analysis assumes that the state takeaways in recent years will not be re-
stnred. The projections in this report further assume that the revenue base now allowed cities will contin-
ue in its cu�rent structure, not only for the first year of annexation but thraughout the years until Thousand
Palms is built out. This is because there is no way of predicting wFtat the State may do next ta attack the
revenue base of cities and counties.
The expenditure projections for the potential annexation of Thousand Palms are based on projected ac-
tual expenditures to provide needed services to this community. Even though Cathedral City has had to
significantly restructure ifs spending plan this fiscal year to achieve a balanced budget, it is appears that
the City has adapted its expenditure model to match its reduced revenue stream.
As it concerns the proposed Thousand Palms annexafion, it appears that Cathedral City can more com-
fortably annex this area with a balanced budget only under a scenaria where the City contracts for
fire/EMS service from Cal Fire. As this unincorporated area develops over time, the City will develop the
fiscal capability to solidify its revenue base and support needed municipal services to Thousand Palms.
!t should be noted that it is expected that the tax base, during the first few years after annexation, wi{I
grow without requiring a proportionate increase in public safety expenditures, which is the major cost of
extending municipal service to Thousand Palms. The public safety staff infrastructure will be established
in the initial year, and then grow much more slowly compared to the rise in revenue due to increases in
property tax, transient occupancy tax, and sales tax. For example, the Police Department will initially
begin servicing the area with fiwo patrol beats. It is unlikely that the number of beats will need tQ increase
for many years, if ever. But there wifl be a need #o incrementally increase the number of sergeant, detec-
tive, and support staff hours as the area grows. So, the basic staff infrastructure to provide police service
will be established at the very beginning, and then supervisory and support services will grow slowly and
incrementally over time.
In any event, assuming that fire/EMS service will initially be provided by Cal Fire, the following Tabie II-F,
entitled, "Summary of Annual RevenueslExpenditures, lnitial Year, Proposed Thousand Palms Annexa-
tion," shows the projected revenues will roughiy balance the needed expenditure to provide these ser-
vices.
Tabl� II-F
.. , .�
.�? � Pu�;�
C.`ciy r�f L<�tlzc�clrard (,it��
Table CI-F shows that estimated expenditures would slightly exceed projected revenues available for gen-
eral municipal purposes produced from the Thousand Palms area by an estimated $61,289 {$3,806,510"
—$3,745,221) during the first year of annexation. This is based on an expenditure plan that would involve
the City contracting with Cal Fire for fire service to the annexed area per Fire �ptian #2. The City has the
ability through its expenditure plan to change this slight deficit into a slight surplus by delaying the fiiling
one of the two Sergeant positions until expected development at the I-10/Bob Hope Drive interchange
gets underway.
If, as part af the annexation, the City provided firelEMS service initially as described in Fire Options #1 or
#3, the projected expenditure plan would cost $4,145,896 which wauld produce a first year deficit of
$219,807 ($4,145,896 -$3,926,089}. The cost differential of initially providing City rather than Cal Fire
service is due to Cal Fire's longer duty week, and the City's per shift deployment of four, rather than
three, firefighters for Fire Station 35. This will require funding 12 rather than 9 firefighters to provide basic
fire/EMS response, including ambulance service.
Eventually, the revenues would increase as development occurs, permitting the City to decide whether it
would be advantageous to extend City fire and ambulance service ta this area. If that decision is eventu-
ally made, the City obviously would need to work with Cal Fire to enable that agency to continue its `re-
gionaY response responsibilities as discussed in this report. There also will be a need to negotiate issues
related to cost sharing and the pravision of dispatch services.
Annexatian Advantages/Disadvantages
It appears that, if the annexation occurred, service levef to Thousand Palms would improve. Examples of
these service improvements are:
• Improved police patrof with two police patrol beats, rather than one police beat.
• The opportunity to provide public access to a police service office in the Thousand Palms com-
munity.
• When increased revenue f�om new development allows, fire service, whether provided by the City
or Cal Fire, can be improved to four firefighter/paramedics for the initial response unit to a struc-
tural fire or emergency medical response. This will enable either agency ta meet the national "2
in, 2 ouY' standard for structural fires upon initial response.
• Access to meetings where decisions are made affecting Thousand Palms will be much more con-
venient to area residents. (City Council vs. 6aard of Supervisor meetings; City Planning Commis-
sion vs. County Planning Corr�mission meetings.) These "decision meetings° will be in Cathedral
City rather than in Riverside.
• Residents of Thousand Palms will have the opportuni#y to serve on city-wide advisory boards and
commissions.
• Voters in Thousand Palms will have more of an opportunity to run for local elective affice {5 coun-
cil positions vs. one member of the Board of Supervisors).
"$3,926,089 as shown on Table II-B, Total Available for City Operations, is reduced to $3,745,221 to
reflect the absence of ambulance revenue if Cal Fire initially provides fire/EMS service as contemplated
by fire option #2.
, ?.} � �'r��;e
I Revenue $3,926,089 � $3,745,221 " I
� Expenditures $4,145,896 I $3,806,510 n �
� Revenue Under Expenditures ($219,807} � ($61,289) �
I" See Table I I-B, "Total Available for City Operatians," foofnote #7 I
6 See Table II-E, "Fire Option #2"
C;'itv �ai��titectt�al +L"id�.
• Access to most land use and permit processing will be in Cathedral City rather than in the City of
Riverside.
• The City has higher standards for fhe provision and funding of parks than the Desert Recreation
District, potentiaUy resulting in the provision of mare park acreage and improvements in Thou-
sand Paims.
• 7he City has other Developmen# Impact Fees which will help improve the infrastructure of Thou-
sand Palms and the remainder of the City.
• The City has some development regulations which are different than those provided by the Coun-
ty.
Other services, such as anima! control, code enforcement, and street maintenance should be comparabls
to the service currently provided to Thousand Palms. Park maintenance, recreation programs, and street
median and street light maintenance will not change since these services will continue ta be provided by
the Qesert Recreatian District. In addition, water, sewer and drainage and fload control will continue to be
provided by the Caachella Valley Water District, electricity will be provided by the Imperial irrigation Dis-
trict, and gas will be supplied by the Southern California Gas Company.
Perhaps the most important advantage of a potential annexation is that the community will have unified
governance and not be split with portions of the community overseen by the County, and anather portian
of the community o�erseen by ane or two cities.
Possible disadvantages of the annexation to Thousand Palms are:
• An increase in the sales and use tax by $.01 until 2015; and
• An extension of the City's Utilities User's Tax to Thousand Palms.
The benefits of an annexation to Cathedral City are:
• It will add undeveloped areas with excellent future freeway access which, as the unincorporated
area develops, will expand the City's financial base, creating a more fiscally stable City in the long
term.
• The initial annexation would enable the City to develop and preserve a basic police staff 'infra-
structure' to serve this area, while at the same time providing an improved level of service to
Thousand Palms. 7his wauld also enable the Department to stabilize its staffing and service
structure for both the existing city and the Thousand Palms area.
• Future revenues as the annexed area develops will permit fire service to improve in �his area.
This could imprave the basic staff and equipment infrastructure for the Fire Department.
• The annexation wiil not reduce services, or the ability to provide these services, to the existing
City.
The disadvantage af the annexation of all of Thousand Palms #o Cathedra! City is:
• The revenue/expenditure balance appears to be a negative balance, although it likely could be a
"wash" or a slight surplus if the City contracts initially with Cal Fire for fire/EMS service, and police
staffing is slightly adjusted during the first year of annexation. So, the City can avoid a negative
impact on its current service levels in the initial year due to annexing the entire area by adjusting
its expenditures for police service. 7hereafter, as explained in Chapter III, the annexation should
be a financial benefit to the City.
As surprising as it may seem, given the recent fiscal challenges faced by both the City and the County,
there appears to be some clear advantages to both Thousand Palms and Cathedral City to pursue the
proposed annexation.
In Chapter III which follows, the first year expenditure/revenue projections just discussed will be expand-
ed to include estimates of expenditures/revenwes after five years, ten years and at build out.
;� � .2•x � �'�:�r�
�...e
Cr�� rfj��.'afitetlrcai Cif��
Chapte�r III
Fiscal Analysis
Future Deveiopment Including Bui�d Qut
Thousand Palrr�s
Introduction
In Chapter I(, the initial year fiscal analysis regarding the potential annexation of Thousand Palms by the
City of Cathedral City was presented. This anafysis compared projected first year revenues which would
be produced in Thousand Palms with expenditures required to maintain or exceed current lacal gavern-
ment sen�ice leveis.
As required by LAFCO, this chapter projects future revenues and expenditures to determine if an ade-
quate level of senrice can be properiy funded in Thousand Palms at build out. Using the revenue/
expenditure data from the Chapter ll, these projections are based on the future land use plans for this
area as reflected in the County's Gene�al Plan, with the exception of the already approved Specific Plan
of the Berger Foundation for their Classic Club development, and the plans for property northeasterly af
the I-101Bob Hope Drive Interchange, atherwise known as the Messenger project.
The period af time to achieve build out is assumed to be 30 years. lt is recognized, however, that eco-
nomic conditions can fluctuate over three decades, so the length of time to achieve build out likely will
vary, and could range anywhere from 25 — 60 years.
Clften, aver a 30 year period, financial projeciions are made on a straight line basis using current estimat-
ed revenues and expenditures. While, as explained below, some of the projections in this report use a
straight line analysis, the effort of this study is to provide a more refined approach in preparing future rev-
enue and expenditure estimates far this area. Not only are revenue(expenditure estimates at build out
provided, but revenue/expenditure estimates during the first five and ten years are provided as well.
As an example of ihis more refined approach, this report assumes that the Berger Foundation and Mes-
senger projects are more nearly rsady for development than the remainder of Thousand Palms. There-
fore, these two projects are assumed to be fuliy developed much sooner than a 30 year period, possibly
over the next 15 years. For the remainder of Thousand Palms, however, it is assumed that single family
development will continue on a minimal to modest basis for the next five years, and then gradually in-
crease to a higher rate of development for the next 25 years using a straight line projection, especially as
the Berger and Messenger projects near completian. Regarding multi-family development in this area,
except for the Berger Foundation and Messenger properties, it is assumed that this housing type in the
rest af Thousand Palms will not be constructed during the first 5 years, and then will be constructed over
the following 25 years to build out, again using a straight line prajection.
Assurnptions
Some of the other specific assumptions which are used to achieve a less generalized and more refined
future expenditure/revenue projections until build out are as follows:
Two planned freeway interchanges in the area along the I-10 corridor will be constructed in
2022 and 2032, and it is projected that each new inierchange will see the construction of iwo
travel hotels of 125 raoms each,
2. It is assumed that the hotel at the Classic Club will be constructed during the first 5— 10
years after annexation.
3. lt is assumed that cammercial/industrial development in Thousand Palms during the first 5—
10 years after annexation wiil be concentrated in the Berger Foundation and Messenger pro-
�;a .�; �S � P�r�;e
�
C:fy „f C`utltedraJ C'it,}�
jects, with the remaining commercial/industrial in the remaining area developed subsequent
to those two projects in accordance with the County's General Plan.
4. It is assumed in this report that the County's General Plan will provide the basis for land use
development outside of the property which will be developed by the 8erger Foundation and
the Messenger Project. It is realized that over a 30-year period, changes in these General
Pian designations may occur. This report daes not, however, speculate on any possibie land
use changes.
5. As a note to this study, while this report provides revenue and expenditures estimates five
and ten years after annexatian, that leval of develapment along with the revenue it wil! pro-
duce and expenditures it will require, coufd easily be sfretched to a longer time frame, say 10
— 20 years. This reflects the uncertainty of the timing and extent of economic recovery over
the intermediate and long term.
In addition to the specific assumptions just mentioned, there are a number of genera! assumptions used
by this report in making revenue and expenditure prajections for the next 30 years in achieving build out.
These general assumptions are:
• Build Out. As previously mentioned, the period of time for build out is assumed to be 30 years.
This is based on the assumption that economic recovery will delay the momentum of economic
development for the next 2— 4 years, but that m�st of the area will be devefoped within 25 years.
It fikely will take an addi#ional five years to develop the more difficult remaining properties, with to-
tal build out occurring within 30 years. Again, build out, however, could take 40, 50, or even 60
years to compiete.
• Land Uses. The land use assumptions for preparing revenue/expenditure projections are based
on the County`s Generai Plan for the vacant areas in Thousand Palms. Exceptions to the County
General Plan land uses are SP-343 (Berger Foundation Specific Plan) and the land use pro-
posafs far approximately 166 acres at the northeast quadrant of I-10 and Bob Hope Drive, some-
times referred to as the Messinger Project.
• Yield. Standard measures for projecting the number of residential units, or commercial square
foatage, based an land use acreage in the County General Plan, are used in this report. Excep-
tions will be specific proposals, including adopted specific plans, where the yield for different land
use types has already been established by the property owner and/or developer. For example, for
all residential units to be developed under the County's General Plan, it is assumed that there will
be 2.56 pph (persons per household) in developing population estimates for this area. However,
for the Berger Foundation, it is prajected that occupancy will reflect data from Palm Desert, or 2.2
pph. For the Messenger Project, it is assumed that there will be 3.0 pph for single family residen-
tial development, and 1.8 pph fo� multi-family residential development. These latter figures are
used by the City of Cathedral City and seem more appropriate for the type of development pra
posed in this area. Further, it is assumed that the residential units identified in the Berger Founda-
tion and Messinger Projects are the actual number of units expected to be constructed, while the
QUs covered by the County's General Plan are "gross" numbers. !n this latter case, the actual
projected units are reduced by 15% to account for roads, streets, utility easements, and other
constraints in deveioping residen#ial property.
• Revenue Data Base. ihe primary source of financial data used to develop long-term revenue
projections is income information obtained from the City's actual revenues, pfus current revenue
data supplied by the County, where applicable. Revenues for the first year of annexation are pre-
sented in Chapter II, and these figures are projected into the future until build out using either a
per capita basis or another formula which pertains to a specific type of revenue.
• Expenditure Data Base. The primary source of data to prepare long-term expenditure projec-
tions is infarmation from the City's budget, plus current cost estimates from County service agen-
cies, when pertinent. Again, the expenditures for the firs# year of annexation are presented in
Chapter II and are projected into the future basad on either a per capita basis or on other formu-
lae.
• Revenue 5ources. No attempt has been made to predict new sources of revenue or changes in
rates or formulas for various revenue sources. An exception is the Transactions and Use Tax
, , , - 2�i � I'�t� �:
Citv uf'Cutizcfcirul C'iry,
(TUT). While this tax may be extended by voter approval, this report assumes that the TUT will
expire in June 2015.
Offsettina Revenues/Exaenditures. As in Ghapter !I, the report assumes that certain operations
or functians, such as building, planning, and code enforcement, will not be included in revenue or
cost projections, since fees pay, or should pay, for the expense of these services. If that is not
occurring on a current basis, the City may need to review their fees to insure that offsetting reve-
nue is received for specific services provided by the City, and that these services are not being
subsidized by the general taxpayer. For the next several years unti{ build out, it is assumed that
the City's fee schedule will cover the costs for building, planning, and code enforcement services.
Exceptions to this include General Plan updates, over the counter consultations, and collabora-
tion with other local and regional agencies. Funding for these services are included in future pro-
jected costs.
+ Infla#ion. The Model upon which this report is based allows the readerluser to use the numbers
presented using different inflation rates. This report, however, assumes an inflation rate of zero.
As a result current and future revenues/expenditures will be presented in constant dollars. This
assumes that any future inftationary increases will impact revenues and expenditures equakly.
These assumptions are just that: assumptions. They are useful for the purposes of a study, but are not
necessarily an exact predictor of where or when specific development or development types will occur.
Again, residential development may be completely constructed over the next 30 years, but build out may
not occur for a longer time period.
Populatian Estimates
Key to predicting future revenues and expenditures is estimating the population grawth of the Thousand
Palms areas. This information will help determine the amount of future revenues produced in this area as
well as the cost to serve the new people living in this community.
Currently, based on the 2010 census it is estirnated that the Thousand Palms population is 7,715. !t is
estimated that 24,242 new residents will eventually be added to this area, and at build out the estimated
population wilf be 31,457. This estima#ed build aut population is based on the construction of an addition-
at 3,715 single family homes and 6,429 multi-family homes, or a total of. 10,09Q new residential dwelling
units (DUs). Of this total, 754 DUs would be constructed in the 8erger Faundation project, 2,200 DUs in
the Messenger project, and 7,136 DUs in the remainder of the area in accardance with the County's
General Plan.
As previously mentioned, this repart assumes that the Berger Foundation and Messinger prajects would
be canstructed initialiy over the first 15 years after annexation, with residential development in the re-
mainder of fhe area occurring an a minimal to modest basis initially, and then accelerating after the Ber-
ger Foundation and Messenger projects are well established.
Based nn these assumptions, it is projected that the population of the Thousand Palms area will be 9,489
in the fifth year after annexation, and 10,579 in year ten. Depending upon the economy and the rate of
growth for Thousand Palms and the Coachella Valley, the population estimates for years five and ten may
turn out to be the estimates for some future years like years 10 and 20. Providing periodic five year popu-
lation projections beyond year ten as presented but are imprecise.
Based on these assumptions, the foAowing Table III-A presents #he population projections through build
out.
?i � pnb,,�>
Gity QJCrctBteclrcar C�it�
..-
. . -. . . - . . . •
Year Est. Papulation
� 2012-13 (Base Year) 7,715 �
� 2017-18 (5 Years) 9,489 �
� 2022-23 (10 Years) 10,579 �
� 2027-28 (15 Years) 18,250 j
� 2032-33 (20 Years) 22,815 �
� 2037-38 (25 Years) 27,380 �
4 2042-43 (Build Out) 31,945 �
In addition to the population eskimates at 5, 10, 15, 20, and 25 years and at build out, it is projected fhat
there will be substantial nan-residential development. A portion of this development will consist af 16
acres af executive office, or 230,OQ0 square feet per the Berge� Faundatian Specific Plan. The Messen-
ger Plan proposes 190 square feet of office and other services.
For commercial, retail, and retail mixed use development, it is a projected that ihere wifl be 3,435,163
square feet of development. �f this amount, 500,000 square feet is in the Berger Foundatian Specific
Plan for the land use designations af mixed use retail village or community commercial development. For
the Messenger Project, 320,000 square feet of commercial and restaurants is proposed. The remainder
of the projected cammercial development is in the County's General Plan.
The combined plans contain 17,036,020 square feet of business park and industrial development. 7his
includes 1,200,000 square feet (Research and Deveiopment) on 69.60 acres per #he Berger Foundation
Specific Plan, and 2,220,000 square feet of light industrial is projected in the Messenger project. The re-
maining business park/industrial square footage is included in the County's General Plan.
Since the pro}ected business park and industrial development reflects a significant amounfi of square
faotage to be absorbed by the markef place — perhaps more than could reasonably be absorbed by the
market given similar projects which may be proposed in the Valley over the next 30 years or more — this
report in developing its property tax revenue estimates uses a per capita projection based.on the current
ratio of property tax income/population. While this may produce a more conservative revenue projection
for this tax, this approach may provide more useful data than to assume that over 17 million square feet
of business park and industriaf development will be absorbed by the market during the next 30 years.
�Revenue EStimateS
Per Capita Revenue
As just mentioned, the property tax revenue is projected on a per capita basis. The current revenue pro-
duced by Thousand Palms is divided by the current population, and the resulting property tax per person
income is projected based on increases in the area's population. Again, this approach was used since it
was concluded that property tax income based on over 17 milCion square feet of business park and indus-
trial development and over 3.4 million square feet of retail/commercial may produce an unreasonably op-
#imistic result. It may be that over time some of this acreage (over 1,000 acres in the County General Plan
outside of the Berger Foundation and Messenger Project land), will be rezoned to residential, institutional,
or some other use.
In addition to property tax, other revenues are projected on a per capita basis including the:
• Structural Fire Tax;
• Property Tax In Lieu;
• Sales Tax Comp Fund;
• Transaction and Use Tax (until June 2015);
• Utilities User's Tax;
• Franchise Fees;
• Business License Fees;
;;� .
?3 � Prr,�e
CFf�� O� ili#�tlt�PCl% �11Y
• Fines and Forfeitures; and
• Charge for Services.
Revenue from these sources is caiculatecE at $387.60 per capita untii June 2015 at which time the per
capita amount is reduced to $349.06. These revenue sources are projected to produce $42,636 during
2013-14, increasing to $619,232 by 2017-18, and then growing to $999,708 by 2022-23 using the as-
surttptions in this report. By build out, these revenue sources will produce $8,457,723 annually due to the
projected population increase in Thousand Palms.
Transient Occupancy Ta�lT"ime Shares
The Transient Occupancy Tax (TOT} is the so-called hote! or bed tax charged by cities in the Coachella
Valfey for visitors lodging at local motels, hotels, and resorts. In Cathedral City the rate is 12%.
ln Thousand Palms there is one travel hotel, the Red Roof lnn. Proposed to be constructed as part of the
Messenger Project is an upscale hotef and a travel hotel at the Bob Hope and I-10 Interchange. lt is ex-
pected that both hotels will be constructed within the first five years after annexation, with the first hotel
beginning construction during 2013-14. This 100-room hotel is expected to be completed by 2014-15 and
a 300-room hotel by 2017-18.
Expected to be constructed during the first 5-10 years after annexation is the resort hotel at the Classic
Club (350 rooms). This facility is identified as the Golf View Hotel on the Berger Foundation Specific Plan,
and is focated on 17,60 acres next to the Classic Club Goif Course. The Plan also envisions the construc-
tion of 216 time share units.
It is assumed that, over time, four more travef hotels will be constructed, twa each at the two new inter-
changes expected to be built in the future. For the purposes of this report, it is projecfed that one inter-
change, along with twa travel hotels, will be constructed in 2422, and the other interchange, also with two
travel hotels, will be constructed in 2032.
The construction of these facilities will have a significant impact on the short-term and Eong-term financial
feasibility of fihis annexation. ihe constructian of the two hotels by Messenger and the resort hotel by the
Berger Faundatian is estimated to produce a$32 million in additional revenue to this area. The construc-
tion of the four additional travel hotels plus the Berger Foundation timeshares during the next 20+ years
will produce another $1.3 million of increased income in terms of today's revenue.
5ales Tax
ihis report assumes that the 500,000 square feet of retail/commercia[ for the Berger Faundation Specific
Plan wilE be developed over the next 15 years using a straight Eine projection. This includes 400,000
square feet of retail in a mixed use retai! village per the Berger Foundation Specific Plan.
Based on the developer's projections, it is assumed in this report that mast of the Messenger Project's
320,000 square feet will be developed by 2021. While major development of commercial square footage
for this project may occur within a 5-year time frame, the 15-year projection is used since future commer-
cial development in the context of the current economy is uncertain.
ihe remainder of the area covered by the County's General Plan contains 276.9fi acres which would pro-
duce approximately 2.6 million square feet of commercial development. This amount of commerciaf
seems excessive for this area end for the Coachefla Valley as a whole, and, over time, this acreage may
be converted to ather land uses.
For the purposes of this anaiysis the report assumes that the retail/commercial for the Berger Foundation
and Messenger Projects will be developed over a 10 - 15 year period, and that the remainder af #he
commercial will be absorbed over a 30-year period until build out.
It is estimated that Thousand Palms will prnduce an additional $440,000 in sales tax income annually af-
ter five years of annexation, which will increase to approximately $2.2 million annually after 10 years. At
build out the estimated annual revenue from this source is an estimated $7.8 million.
�9 ! �'rtacj
i�f�' r�f �.°cctltecdrnl (.'ity
Non-General Fund Itevenue
The report only assumes the receipt of non-General Fund income consisting of state gas tax funds and
Measure A funds. These finro revenue sources are projected on a per capita basis based on the report's
papulation projections.
It is estimated that the per capita income produced by these two saurces are: Gas Tax ($26.83/per capi-
ta}, and Measure A{$19.61 per capita}, or a total of $46.44 per capita. It is estimated that these two re-
stricted revenues will produce $465,793 in 2017-18, and $715,176 in 2022-23. At build out, it is estimated
that these two revenue sources wil[ produce $1,460,306 ($46.44 x 31,445} annually. These funds are re-
stricted to street constructian and maintenance activities and cannot be used for any "general city pur-
pose."
The projected revenues related to the potential Thousand Palms annexation are summarized in the fol-
lawing Table III-B.
I 2012-13
� 2013-14
2017-1$
2022-23
2027-28
(
� 2a32-33
�
� 2037-38
�
� 2042-43
Est. General Fund Revenue Esi. No�-General Fund Revenue
$3,745,211 $358,289
3,875,861
5,128,153
10,751,547
15,436,963
18,898,916
21,820,Q74
24,744,721
465,793
715,176
1,460,306
As can be seen in this table, there is a gradual increase in revenue to suppo�t general operations, mostly
based on the projected increase in population since many of the estimated revenues accruing to the City
are based on per capita projecti�ns. There is a much larger increase between 2017-18 and 2022-23 as-
suming the construction and aperation of the resort hotel at the Classic Club Gol# Course and the Mes-
senger hotels along the I-10 freeway.
Of course, there is no guarantee that build out will be accomplished in 30 years. The revenue estimates
for the first ten years may not be accomplished in that fiime frame, but may take longer to achieve de-
pending upon economic condifions in the Valley. Also, based on the acreage set aside for commercial
development in the County's General P(an, the sales tax revenue in these projections may be optimisiic.
On the other hand, as explained earlier, the property tax revenue projections are likely conservative.
Expenditure Estimates
The expendikure projections a�e based on the cost of police, fire, and other ciry services currently being
provided to the City of Cathedral City and in providing service to Thousand Palms during the first year of
annexation as described in Chapter !I of this report. Based on that analysis, providing City serviees to
Thousand Palms +n 2013-14 would cost $3,806,510 against $4,012,685 in revenue, providing a slim bal-
ance of $206,175. Initially, this balance would stay about the same, and, by 2097-18, it is estimated that
expenditures to serve Thousand Palms with an estimated population of 9,489 would total $5,126,153
against revenue of $6,322,998, or a surplus of $1,196,q45. During the next five years, with the expected
construction of the resort hotel and other +mprovements, this surplus would grow to $2,656,259 by 2422-
23. At build out, the cost of serving Thousand Palms in terms of General Fund expenditures is estimated
at $15,428,686 against General Fund income of $24,744,721, or a surplus of $9,31&,035 in current dof-
lars. Of caurse, these numbers are only estimates that could change dramatically based on rate of
growth, type of development, and changes in basic land uses. These figures are summarized in Table I�1-
C which presents the cost of serving Thousand Palms over the next 30-years, or until build aut occurs.
_'ii � ,t'f1�r�
�'i1y n f C,'c�th •vt►r:r1 C �ty
These figures demonstrate that initialiy revenues would barely support needed expenditures. And this
expenditure plan assumes that the City would contract with Cal Fire for fire service, otherwise the City
would experience a cieficit each year.
This Table also shows that by the fifth year after annexation a substantial General Fund revenue surplus
would accrue. This is based on the substantial TOT income which would be produced by the two hotels
on the Messenger Property. This assumes that both facilities will be constructed by the fifth year of an-
nexation. Additional revenue wauld be produced by the resort hotel at the Cfassic Club between the fifth
and tenth year after annexation, Futther, substantial increases in sales tax will occur by this time due to
development of retail at the Berger Foundation and Messenger projects. Without this income stream, the
revenues and expenditures would be evenly matched, and no major revenue surplus would be created.
By #he tenth year of annexation revenues would clearly exceed expenditures even if the classic club re-
sort hotel were not on line. By the 30t" year, or whenever build out occurs, this annexed area would clear-
ly pay for needed municipal services in Thousand Palms and would have a significant positive economic
benefit to Cathedrai City.
Expenditures for specific services were calculated as described in the following paragraphs. lnstead of
providing a straight line projection af expenses, an effort was made to anticipate the specific needs of the
community based on its population and budget for those services, especially for the major cost of police
and fire service.
Police
In the initial year of annexation as explained in Chapter !I there would be 11.75 Full-time Equivalent (FTE)
police officers with additional support staff such as a Records Clerk and .5 FTE Dispatcher, for a total of
13.25 FTE police staff. This provides basic police staff infrastructure to serve Thousand PEans at the level
of 1.52 police ofFicers per thousand vs. the current service level of .75 sheriff s deputy per thousand popu-
lation.
During the follawing five years there would be the addition of two FTE Sergeants. This would increase the
number of Sergeants assigned to Thousand Palms from two to four, providing a Sergeattt on duty 24/7.
Also budgeted would be an additiona! Qetective, Dispatcher, and Records Clerk. The number of police
staff would then increase to 18.25 FTEs. Also two additional police vehicfes would be purchased.
During the next five year period (2019 — 2023}, the City would add per the projected expenditures in this
report faur police o�cers, two Sergeants, one Detective, ane Dispatcher and two Records Clerks. By the
end of this period, and ten years af#er annexation, the Police Department would have 21.75 police officers
to service a community of 10,579. This would amount to 2.06 police officers/thousand, a temporary in-
crease from the initial level of staffing using the measure of police staffing of staff/1,000. It would be a
level of staffing substantially higher than is currently being provided. Overall Police Department staff
woufd total 28.25 FTEs. Also, three additional police vehicles would be purchased.
During the next 20 years to build out, it is estimated that there would be added to the Police Department,
15 additional police officers, four detectives, two Sergeants, three Dispatchers and four more Record
Clerks. Six additional police vehicles would be acquired. By 2d42-43 there would be 42.75 FTE pofice
afficers to serve an estimated population of 31,945. This amounts to 1.34 officers per thousand popula-
tion served. Total Police Department staff would number 6225 FTEs.
Animai Cantrol
The funding for Animal control in the initial year is $70,483, increasing to $141,000 by year ten. As the
population for Thousand Palms doubles in 1fl years, so wauld the amount budgeted for this service. At
build out, it is projected that the cost of Animal Control is projected to be $400,000.
�a .
.� � � ��,,, �
� 2013-14 4,012,683 3,8�6,51d 206,173 �
� 2017-18 6,322,198 5,126,'[53 1,196,045 (
� 2022-23 10,751,547 $,095,228 2,656,259 (
� 2042-43 24,744,721 15,928,686 9,311,035 �
�'it�� r�f Crr#itecl�•taf Crty
Fire
As mentioned in Chap#ers II and IV, it is recammended initially that the City contract with Ca1 Fire for
fire/EMS service for both operatianal and financial reasans_ The 30-year projection assumes that this ar-
rangement wil! be in place for at least ten years. By the 10"' year, it is assumed that the Palm Desert fire
station which would partially serve Thousand Palms would be constructed and stafFed. As a result, 40%
of that station's staffing expense would be included in this budget, increasing the fire budget in current
dollars to $2,352,OOfl. This assumes tha# there will be a continued contract with Cal Fire at this time.
By build out the Fire budget is projected at $3,986,400. Still assuming a service contract with Cal Fire, the
budget would include the purchase of an ambulance with the City paying $1,000,000 for its operation. It is
also projected that a fourth firefighter wouid be added to the engine company at Fire Station 35. This
budget amount would give the City the flexibility to continue the contract with Cal Fire, provide additianal
money for apparatus, add a fourth firefighter/paramedic to the current Cal Fire Type t engine located at
FS 35, and to support an additianal Cal Fire engine company in Palm Desert which would partially serve
Thousand Palms. Or this leve! of funding could suppor# the provision of fire service by the City at Fire Sta-
tion 35 using three or four person staffing of the engine at that location.
Administration
In the initial year of annexation, additional staff is not added to administration which includes finance, hu-
man resaurces, MIS, and, in a broad sense, legal services. As the area grows, however, additianal staff-
ing will be needed. ihe expenditure projection for Adrninistration staff and services includes an annual
cost increase of $247,000 for two positions by year five and $494,000 by year ten with the addition of an-
other clerical and a professional position. At build out, this expense increases ta $988,000 with the addi-
tion of four more positions to this Department or accumulated total of 8 fu[I-time pasitions.
Community Development
As in administratian, additional staff is not added to this function (planning, engineering, public works) in
the initial year of annexation. As the area grows, however, funds for increased s#aff would be needed. By
the fifth year after annexation, #here wauld be an annual increase of $247,OOo to support two new posi-
tions in #his Department. This amount would grow to $654,000 annually by year ten with the addition af
three new pasitions. At build out this budget would graw to $1,308,000 with #he addition of �ve more cleri-
cal and professional positions, or a accumulated tota! o# 10 fu[I-time positions.
City Clerk
The cost of election service is estimated at an annual amount of $3,500 initially. By year five, it is estimat-
ed to be $5,Q00 annually, and by year ten, $7,000. Again, the cost of efections will double in concert with
a similar popuiation increase. At build out, it is estimated that the cost of elections will be $15,000. In ad-
dition, $5,000 will be included in this budget to support the 7housand Palms Community Council, far a
total budget of $20,000.
Public Maintenance
Public maintenance is basically street, signal, and sign maintenance. The expenditures for this function is
based solely on revenue from gas tax and Measu�e A funds. In the initial year this amount is estimated at
$358,000. By 2017-18, this revenue source is expected to produce $465,793, and by 2022-23 this
amaunt shauld be $795,176. By build out, this revenue source should praduce $1,460,306.
By build out, the Generai Fund expenditure portian of the City budget is projected ta be $15,549,683, with
an additional $1,460,306 in restricted revenue to support street maintenance services. 7he overall esti-
mated City budget for Thousand Palms at build out is $17,009,989 as presenfed in Table III-D, "Thousand
Palms Expenditure Budget at Build Out."
. r .� -$' ('�'�ge
C"ity uf Ccgahectrcaf C'�ty
I Police
� Fire
� Administration
j Community Development
I Animat Controi
� Clerk (Elections)
I Street Maintenance
( Total General Fund Budget
� Total City Budget
$8,731,286
3,986,400
988,000
1,308,000
400,OOQ
20,000
$15,433,686
$16,893,992
$1,460,3Q6
Revenue for Capitai Improvements
In Chapter II it is mentioned thaf one-time revenues wiii be praduced as a resuit of new development.
This income is created from building development fees and development impact fees (DIF). This revenue
cannot be used to support an-going municipal services or operations, but are restricted by state law and
implemented by City ordinances only for needed capital improvements. These improvements are de-
signed to support new devefopment. These fees are narmally paid when an appiicant seeks an entitle-
ment or permit for land development and/or a permit far the construction of residential, commercial or in-
dustrial development.
The development fees in Cathedral City consist of twa categaries. One are Building Development fees
collected for Police and Fire, City facilities, and signalization; the Master Undergrounding Fee; Transit
Development Fee; Park Fees; Art in Public Places; and the City Facility Impact Fee.
The other category of fees is Development Impact Fees (DiF). These fees are designed for new devel-
apment to pay its share of overall City facility needs. The DIF fees in Cathedral City app[y to the City Yard
(vehicle storage}; Palice Community Center; Public Safety Training Site; interchanges and Bridges; Un-
paved Trails; and Pa�ks, Community Center, and Pools.
Each fee category will be discussed in this section. While it is feasible to provide specific estimates of to-
tal DIF fees, such estimates are not feasible far all Building De�elopment Fees. This is because elements
of the formulae for these latter fees cannot be determined at this time, such as the "land cost per acre" at
the time of development which is an element in determining the park fee. These issues are explained in
the following paragraphs.
Building Development Fees
The Building Development Fees, as just mentioned, consist of Police, Fire, Facilities, and Signalization;
Master Undergraunding Fee; Transit Qevelopment Fee; Park Fees; Art in Public Places; and City Facility
Impact Fees. It is impossible to project the incame from all of these fees at this time due to unknown ele-
ments in some of the fee formulae. For example, Park Fees are determined by the number of DUs x av-
erage # of persons per DU x 3 acres per 1,000 rasidents x land cost per acre = total fee. Unfortuna#ely, it
is impossible to determine at this time the "land cost per acre" when the fee is calculated.
For Art in Public Places the formula is 1% of 90% of building valuation for buildings over 15,OOQ square
feet. It is impossible at this time to determine how many buildings over 15,000 will be constructed at build
out, or their valuation.
While a guess could be taken as ta how many square feet of roafed area will be constructed aC build out,
it likely would be too imprecise to �stimate the Master Undergrounding Fee. This Fee is based on a for-
mula of $.15 per square foot of roofed area for al! development.
Revenue estimates for portions of the Building Development Fees, however, can be estimated. For ex-
ample, the City Facility Impact Fee is $1,859/residential unit. Based on an estimate of 9,796 DUs at build
out, it is estimated that this fee will produce $'l8,132,396 in terms of current dolEars ($1,851 x 9,796). The
fee is $10,288/Acre for retail commercial, which is estimated to produce $3,707,281 ($10,288/Ac x 360.35
Acres). The fee for non-retail commercial/industriai is $6,247/Acre. This will produce an estimated
33 � �'�r�; �
�'i!y of �"t�iFted;�ul �ety
$7,214,348 {$6,247 x 1,154.85). The total estimated amount that would be collected by build out for the
City Facility Impact Fee is $29,054,025.
The fee for Police, Fire, Facilities, and Signalization is $150/1,000 square feet of afl development. Since
the average square feet of the 9,796 DUs yet to be constru�ted in Thousand Palms is difficult to project,
only income for this fee from commercial and industrial development has been estimated.
While the current estimates of square faatage for commercial and industrial development at build out
seem excessive, based on the Berger Founda#ion, Messenger, and County General Plans, the following
estimates for this fee are as foilows: Commercial =$589,550 {3,797,000 square feet x$15Q/1,000 square
feet); lndustrial =$2,550,Q00 (17,000,000 square feet x$150/1,000 square feet). This would provide a
total of $3,119,550 for this fee category from commercial and industria[ land uses.
The estimated Building Development fees for Thousand Palms are presented in Table III-E, entitled, "Es-
timated Building Development Fees for Thousand Palms."
Deveiopment Impact Fees (D�F)
Unlike the Building Development Fees, it is possible to project revenue projectians for all of the DIF fees
at build out. The fees are either determined based on $/DU for residential development, or $/Acre for re-
tail commercial development and non-retail commercial industrial develapment.
There are six DIF fees imposed by the City. tn summary, the amount produced from residential develop-
ment includes: $930,620 toward the City Yard ($95/DU x 9,796); $205,716 for the Police Community Cen-
ter ($21/DU x 9,796); $176,328 toward a public safety training site ($18/DU x 9,796); $842,456 ($861DU x
9,796); $519,188 for unpaved trails ($53/DtJ x 9,796); and $15,448,292 for parks, a community center
and pools ($1,577/DU x 9,796). This latter fee will supplement the resources from the Desert Recreation
(�istrict in providing parks and recreation facilities to the benefi# of Thausand Palms.
The amount produced from retail commercial development is based on $lAcre, In summary, for the City
Yard the DIF fee on commercial development will produce $211,531 ($587/Acre x 360.35 acres}. For the
Police Community Center the amount collected by build out will be $47,566 ($1321AC x 360.35 acres).
7he amounf praduced for the public safety training site will be $39,639 ($110/AC x 360.35 acres); for the
Interchanges and Bridges the amount collected will be $1,492,930 ($4,143/AC x 360.35 acres}; far un-
paved trails the amount produced will be $62,341 ($173/AC x 360.35 acres}; and for parks, a community
center, and paols $1,852,559 will be produced ($5,141/AC x 360.35 acres).
The revenue received from non-retail commercial industrial development is also based on $/AC. Devel-
opment of a City Yard is projected to receive $524,342 ($454/AC x 1,164.85 acres); the Police Communi-
ty Center should receive $117,795 ($102/AC x 1,154.85); the public safety training site should be sup-
ported in the amount of $98,162 ($85/AC x 1,154.85 acres}; Interchanges and Sridges should receive
$1,732,275 {$1,500IAC x 1,154.85 acres); Unpaved Trails should obtain $154,750 ($134/AC x 1,154.85
acres); and parks, a community center, and pools should secure $4,588,219 ($3,973/AC x 1,154.85
acres}.
This data is summarized in Table III-F, entitled, "Deveiopment Impact Fees for Thousand Palms.°
3R� j x'�;���
Police, Fire, Facili-
ties and Signaliza- Unable to Determine $569,550 $2,550,000 $3,119,550
tion
ICity Facility Impact $1$,132,396 $ 3,707,281 $7,214,348 $29,054,025 J
Fees
City �xf Ccrtiieclrr�l Citti�
� City Yard
Police Communication
Center
� Pubiic Safety Train Site
� Interchanges & Bridges
I Unpaved Trails
Parks, Community
Cente�, Poals
$930,620
205,716
176,325
842,256
519,188
15,448,292
$211,534
47,566
39,639
1,492,930
62,341
1,852,559
$524,302
117,795
98,162
1,732,275
154,750
4,588,219
$1,666,454
371,077
314,126
4,067,461
736,279
21,889,070
As can be seen from Tables III-E and III-F, there will be a significant amaunt of one-time revenue collsct-
ed from DIF fees for various City-wide public improvements during the development of Thousand Palms.
These revenues will supplement income from DIF fees applied to other parts of the City. Examples of city-
wide improvements are the City Yard ($1,666,454), Police Community Center ($371,077), the Public
Safety Training Site ($314,126), and Unpaved Trails ($736,279}, Examples of improvements which, while
city-wide in application, will have a more direct impact on 7housand Palms are the fees for Interchanges
and Bridges ($4,067,461} and Parks, Community Center, and Pools ($29,889,070). This latter fee cou-
pled with the Park Fees which will be collected as a Building Development Fee will provide substantial
resources for park and recreation facilities in Thousand Palms and rest of Cathedral City.
Summary
Based on the projections in this report, it appears that there should be sufficienf General Fund and re-
stricted revenue to support basic City services to Thousand Palms during the first 5 years after annexa-
tion. Revenues, however, will not be sufficient to accumulate any significant surplus during this period of
time. Between the fifth and tenth years after annexatian, however, there is projected to be a revenue sur-
plus to support City services, and after ten years until build out the revenue surplus will grow significantly
and should be substantial. At the same time, services will equal or exceed services now received in
Thousand Palms, and will equal or exceed those services currently received in Cathedral City.
Also, there appears to be sufficient one-time revenue to suppnrt majar capital improvement projects in
Thousand Palms as well as provide that communities' share of city-wide capital improvements. The in-
come callected for these improvements, particularly for parks and recreation facilities, appear to exceed
what could be obtained otherwise. This is because of the City's authority to impose DIF fees compared to
the Desert Recreation District. As can be seen by this report, the Building Development Fees and Devel-
opment Impact Fees over time will produce a significant amount of capital improvement revenue.
3S � Frah�e
t ?' .
�i�y <jf �arheclr�c�f �'ity
Chapter IV
Flan of Service�
Cammunity of Thousa�nd Palms
The Riverside County Local Agency Formation Commissian (LAFCO) requires as part of any annexation
process that a Plan of Services be prepared for the area proposed for annexation. The purpose of the
Plan is to articulate the service demand for the area at complete development, and indicate how that de-
mand will be met.
In the case of the Plan for Services for Thousand Palms, not anly wi11 the service demand at build-out be
analyzed and discussed, but service demand has been evaluated during the initial year of annexation as
discussed in Chapter 11 of this report. This approach is designed fo assure LAFCO, the citizens of Thou-
sand Palms, and the City of Cathedral City that adequate and satisfactory services will be provided both
initially as well as at full development in a fiscally responsibie and balanced manner. These services will
be provided not only by the City, but by other agencies which currently serve Thousand Palms.
In order to develop a comprehensive Plan of 5ervices, LAFCO has develaped a draft checklist of infor-
mation which should be provided in this Pian. This checklis# is used as a guide in developing this report.
The Plan of Services checklist specifies that the folfowing areas should be analyzed and discussed:
• 8ackground
• Police Protection
• Fire Protection
• Animal Shelter and Control
• Water
• Wastewater
• Electricity
• Solid Waste Collection
• Street Maintenance
• Lighting, Landscaping, and S#reet Sweeping
• Parks and Recreation
• Library
• FinanciaE Information
In addition, this Plan af Services also includes:
• Schools
Aiso, the Plan of Services has grouped under the heading of "Utilities" the following u�ility services:
� Water;
• Wastewater;
• Electricify; and
• Solid Waste Collection Services.
3�i ( i'�7�e
�itv c+j'C�rtlte�`ral �ity
In addition to the utility services specified by LAFCO, the folfowing services have been added under the
"Utilities" category:
• Drainage/Flond Control; and
• Gas (natura!).
Further, this Pian of Senrices also has moved Street Sweeping into fhe more apprnpriate category of
Street Maintenance.
Finally, parks, recreation, and library services are grouped under the heading of "Leisure Services."
In each category of service, ti�e LAFCO checklist asks for a description of the level of service standard
provided by tF�e current se►vice provider, and the level of service which will be provided by the new ser-
vice provider, in this case, the City of Cathedral City. Where the service provider will not change due to
the annexation, and #here will be no change in land use designations, a limited analysis af these services
to the area is required. This presumably is based upon the assumption that the current service provider
will be abie to con#inue its current service role, and to meet the requirements for implementing its master
plan in the impacted service area.
Background
The Thousand Paims community stretches along the northeasterly edge of the I-10 freeway, from west of
Rio de! Sol Ro�d to 38th Avenue, and then easterly to Washington. It consists of over 5,600 acres, with an
estimated population of 7,7151e. When added to the 4,'i00 acres fram Da Vall Drive to Rio del Sol Road, a
total of 9,700 acres is being evaluated as part of this Plan for Services.
This unincorporated area is partly inhabited, but with a significant amount of vacant land. As shown in the
rrtap on Exhibit A(See Chapter I), it is bounded an the southwest by the I-10 freeway, the City of Cathe-
dral City to the northwest, the Coachella Valley Multiple Species Habitat Conservation Area on the north-
west, artd the Palm Desert Sphere of Influence (SOi) to the southeast.
Thousand Palms is mostly a residential community with most af its inhabitants living in the vicinity of the I-
10 freeway, Monterey Avenue, and Ramon Road. There is also freeway commercial in this area, along
with a business park. This part of the community is served by an elementary schoo[, a park with a com-
munity center and library, and Fire Station 35. Adjacent to the fire station is a major fire trainirtg facility
which serves the entire desert region.
Northerly there is scattered, though important industrial devefopment, including nearby surface mining.
Running south along Varner Road toward Pafm Desert 5un City are additional pockets of residentia! de-
velopment, along with the Classic Club Golf Facility and the private Xavier High Schoal.
Currently, 7housand Palms is served by Riverside County, which provides both police and fire/emergency
medical service. Water, sewer, and drainage facilities are maintained and operated by the Coachella Val-
ley Water District. Electrical Service is provided by the Imperial Irrigation District. The Desert Recreation
District maintains and programs the park and community center, and maintains street lights and a major
street median (Ramon Road}. County Library Services operates a branch library next to the community
center, and the public schools are administered by the Palm Springs Unified School District.
On December 8, 2010, the City Council gave direction to submit an application to expand the City's SOI
to include the remainder of the Thousand Paims community. 7his unincorporated area was formally
placed in Cathedral City's SOI by the Riverside County LAFCO in January 2012. This means that if the
area is annexed into a City, it can only be annexed into Cathedral City while it is in the City's SOI. While
the City was interested primarily in annexing the area between Da Vall Drive and Rio del Sol Road, the
entire area is being assessed for patenfial annexation because of the interest of those living and working
in the Thousand Palms community.
Police Proteciion
's 2010 U. S. Census.
. `�+ f � ��b `'
��i% �l f �tY1IJL�tL�'Ql t'�'IY�j,
Current Service Frovider
The current service provider of police protection to the Thousand Palms community is the Riverside
County Sheriff's Department. In accordance with LAFCO's Plan of Services checkiist, the following infor-
mation has been provided by the SherifYs Department.
Level of service standard (farget or goal).
The officer to populatian ratio projected this summer (2012) is .75/1,OOA. Due to County budget cuts, this
ratio was reduced from 1.20/1,000 during the past two years.
It should be noted that many prafessionals in khe law enfarcement community do not believe that the
number of officers per 1,000 population is an appropriate measure of law enforcement service levels. This
is because socioeconomic factors play a more important role in determining the need for the number of
officers to serve a particufar community. Nevertheless, this information is provided as required by the
checklist.
The response time goals by priority type are:
. Priority 1 calls < 5 minutes
• Priority 2 calls < 9Q minutes
• Priority 3 calls < 15 minutes
Wliere is the nearest station praviding counter services to the affected area?
The closest fully staffed Shariff s substation with counter service is focated in Palm Desert. The address
of this substation is 737fl5 Gerald Ford Drive, Pafm Desert, CA 92260. This facility is appraximately one-
half mile fram the middle oi Thousend Palrns at Cook Road, and is appraximately 4.5 miles frorn Fire Sta-
tion 35 which is located in the midst of this community's papulation base. While not providing counter or
public access, a report writing office space is maintained by the Sheriff at #he Thousand Palms Library,
31189 Robert Road, Thousand Palms, CA 92276.
What is the actual tevel of service being prvvided withr'n the unincorporated service area of a
station7
Regarding officer to populatian ratio, it is .75 per 1,000, beginning in summer 2012. As pointed out by the
Sheriffs Department, this number can vary up or down depending upon budget considerations. For ex-
ample, the ratio was 1.20 per 1,000 population fwo years ago. In addition, supplementing this patro! staff-
ing, the California Highway Patrol provides traffic enforcement and accident investigation service to this
community.
Cancerning the requested number of daily patrol hours provided to this area, a specific number was not
able to be provided by the Sheriff's Department. The Department did indicate, however, that there is one
beat officer dedicated #o Thousand Palms, meaning that khere are at least 24 patrol hours provided ta this
community each day. In addi#ion, this beat can be assisted by a Deputy from an adjacent beat when nec-
essary. Further, there is a canine unit assigned out of the Pa�m Desert Substation to serve the Depart-
menYs unincorporated area in the Valley.
Regarding the average response times by priority type, this information was not specifically available for
Thousand Palms, except for the response goals by priarity type presented above.
List and hrie,fly describe any specialized units.
In addition to the above mentioned canine unit, the SherifPs Department has a number of specialized in-
vestigative units which investigates homicides, narcotics, and other high profile cases. As a large law en-
forcement agency, the Department has a number of other specialized units and equipment as well. It
should be noted that most af these units are also available to city police agencies in accordance with
County policy and through mutual aid.
New Service Provider
f� 33 ; I'rr� e
`7 �
C:iry ,tJ C.'�Prte�lra! (rity
The new service provider is the Cathedral City Police Depar#ment. In accordance with LAFCO's checklist,
the following information is provided.
1Vumber of sworn officers eraplayed by the agency.
Rs of July 1, 2Q12, the City of Cathedrai City currently employs 47 sworn police o�cers as authorized in
the City's 2012-13 budget.
Level of service standard (tar�gei or goal}.
The current Ievel of service goal in Cathedral City is an officer to population ratio of slightly less than
1.0/1,000 based on current practice. However, given the geagraphical characteristics of Thousand Palms
at the time of initial annexation, tfie Pian #ar Services envisions the Police Department providing two pa-
trol beats 24/7, plus necessary supervisory and support staff. This will result in 11.75 sworn police officers
(9 officers, 2 Sergeants, and .75 Detective) being added to the Police Department to serve Thousand
Palms. As a result, the initial staffing goaf will be an officer to papulation ratio slightly more than
1.50/1,000. As explained in Chapter il, the requirement for two patrol beats is, in part, because of the
physical length of the Thousand Palms service area. Also, this community is physically separate from #he
developed part af Cathedral City, so there is a need for two beats to provide immediate backup and assis-
tance for emergency calls.
It should be noted that, in additian to the number of sworn offtcers required to serve Thousand Palms,
additional civilian staff will be needed, including 1 Records Clerk and a.5 Dispatcher. This will result in a
total initial Police Department staffing of 13.25 FTEs (Full-Time Equivalents).
If annexation occurs, and as the area grows, the need to expand beyond two beats will no# be required in
the foreseeable future. There will be a need, however, to add Sergeants, Detectives and support staff #o
met future demands of a larger population. Basically, the initial annexation wili involve the investment in
"basic sworn o�cer infrastructure" to provide needed patrol services now and in the foreseeable future,
with additional supervisory and support staff added in the future. This means that the number of officers
per 1,000 population served will slightly decline by build out, but will continue to exceed the number of
officers per 1,000 currently pravided to Thausand Palms as wetl as to the existing Cify.
The response time goals by priority type, and based on actual response times in Cathedral City, are:
• Priority 1 cafls < 5 minutes
• Priority 2 calls < 8 minutes
• Priority 3 calls < 14 minutes
These response time goals are slightly higher than the actual average response times currently experi-
enced in Cathedral City. With the two beat structure proposed for Thousand Palms, it is expected that
these response times will be at or lower than those stated above.
Actual level of service being p�ovided crfy-wide.
With the adaption of the City's 2012-13 budget the city-wide officer to population ratio is .92/1,000. As just
mentioned, since the devefoped portion of Thousand Palms is physically separate from the developed
parts of Cathedral City, the Palice Plan of Services pravides for two patrol beats 24/7 ta serve this area.
This Plan envisions dedicating two patrol beats exclusively ta serve Thousand Palms.
Through this staffing configuration there will be back up for each o�cer pa#rolling this community. Alang
with providing staff far the patrol sergeant function which supervises these beats, and a.75 FTE detec-
tive, it is projected that the officer to population ratio will be slighfJy greater than 1.50/1,000.
As can be seen from this comparison with the existing service level, this will be an improvement over the
current level of law enforcement service and staffing provided to Thousand Palms at the time of initial an-
nexation. ihis ratio will Iikely decline slightly by build aut and at camplete develapment, since the City
would invest in a significant portion of the basic "patrol infrastructure" during the first year of annexation.
The number of daily patral haurs currently provided city-wide, not including supervising patrol sergeants,
is 144 hours. The number of patrol hours per day which will be provided ta Thousand Palms is 48 hours,
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namely two 24/7 patral beats. Again, this is an increase over the current level ot service being provided to
this area.
The average response times by priority type provided city-wide are:
• Priority 1 cafls < 4.5 minutes
• Priority 2 calls < 6.9 minutes
• Priority 3 calls < 7.2 minutes
It is expected that the response times to Thousand Palms will be at or better than these average re-
sponse times.
Additional personnel/faczlities required at build-vut
Based on projected land uses at build-out for the affected area, this part of the LAFCO checklist asks how
many additional personnel and facilities wilf be required to maintain the existing level of service. Initially,
there will be a need for the City to add approximately 9.0 full-time equivalent police officers to staff two
patrol beats in Thousand Paims. There will be a need to also add 2.0 Sergeants, .75 Detective, .5 Dis-
patcher, and 1.0 Records Clerk. Based on the projected initiai City service level staffing of slightly more
than 9.50 officers per 1,000 population served, plus support staff and vehicles, the cost of the first year of
police service to the annexed area is estimated at $2,047,527.
At build-out it is projected that there will be 62.25 FTE police staff, including 42.75 sworn ofiicers at a cost
of $8,847,283. These officers, plus support staff, will be funded by General Fund revenues produced in
Thousand Palms such as property tax, sales tax, transient occupancy tax, property transfer tax, utility us-
ers' tax, fines and forfeitures, service charges, and franchise fees.
It is not expecied that a new police facility wiil be needed #o serve this area. The area will be served from
the Cathedral City police station. It is projected that over time with the expected growth in Thousand
Palms, the current police sta#ion, without expansion, can satisfactorily provide service to this area.
There is the likely passibility, however, that a satellite facility will be lacated in Thousand Palms. At a min-
imum, building space for report writing can be provided, which will allow patrol officers to stay within their
beat while engaged in writing pokice reports. Currently, the Sheriff uses space at the County Library for
this purpose, and there also appears to be space which could be made available at Fire Station 3�. The
proposed plan for development at the northeast quadrant of the 1-10/Bob Hope Drive interchange antici-
pates a cammunity facifity which could also accommodate office space and limited public access space
for the Police Depa►tment. By locating an office at the Fire Statian, or the proposed cammunity facility, the
opportunity for limited public access for police business will be afforded.
The Library and Fire Station are located on Robert Road, and the community facility will be located be-
tween Varner Road and the !-1�, slightfy north of Bob Hope Drive. It is not expected that there will be a
construction expense for any of these potential palice office locations, since the Library and Fire Station
are already in ptace, and the proposed community facility would be pravided through developer coopera-
tion.
Wliere are tlae nearest two palice stations prvvidi�cg eounter service ta tlie affected are?
The two nearest police stations providing cnunter service to Thousand Palms are the Sheriff's Palm De-
sert substation at 73750 Gerald Ford Drive, Palm �esert, CA 92260, and the Cathedral City police station
focated at 68700 Avenida Lalo Guerrero, Cafhedral Gity, CA 92234. The Sheriff's substation is approxi-
mately 4.5 miles from Fire Station 35, near the bulk of the residential, commercial, and business park de-
velopment in Thousand Palms. The City police station is an estimated 6.6 miles from that same location.
List any specialized units of the Poliee Departrnent.
The Cathedral Gity Police Department participates in the Coachella Valley Violent Gang Team Task
Force and participates in the Palm Springs/Cathedral City joint SWAT Team.
Fire Protection
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Background
Currently, fire protection and emergency medical services (EMS} are provided to the Thousand Palms
area by the Riverside County Fire Department under contract with the state fire agency, commonly known
as Cal Fire. These services are provided from Fire Statian 35, lacated in the Thousand Palms community
at 31920 Robert Road. Cal Fire respands to fire and EMS calls with one Type-1 fire engine stafFed by
three firefighters (3 — 0 sta�ng}, including at least one firefighterlparamedic. Ambulance services are pra-
vided by American Medical Response to unincorporated areas, including the Thousand Palms communi-
ty, under contract with Riverside County. The ambulance is staffed with at least one paramedic, but the
ambulance staff is not qualified as firefighters. Cal Fire can also provide ambuiance service for cities
which contracts with that agency for fire service.
By contrast, Cathedral City provides fire, EMS, and ambulance services through its �'ire Department. One
scenario evaluated by this report anticipates that these services will be provided to Thousand Palms by
the City, using Fire Station 35. Under this scenario (See Option I, Chapter II), a fire engine would be lo-
cated at Fire Station 35 and staffed by two frefightedparamedics. An ambulance would also be located at
this fire sta#ion, staffed by two firefighters/paramedics'9. This means that for approximately 70% of the fire
calls, Cathedral City can respond with a fire engine and an ambulance, and will have four firefighters
available for the initial fire attack. This meets the OSHA standard of "2 in, 2 out" for the initial fire re-
sponse. It should be noted, however, that in 30% of the cases when the ambulance is "on call," the City
would initially respond with two firefighters, requiring a backup engine, or City staffed ambulance, before
the "2 in, 2 out" standard can be met. This would be a lower level of service ihan is currently received in
Thousand Palms.
A second scenario (See Option ll, Chapter II) is to contract with Cal Fire to provide service to 7housand
Palms. This Option was developed due to the reduced fevel of service during approximately 30% of the
�re calls if fire response was provided by the City, and the projected deficit in tax revenue available to
support both full City palice and fire service ta this area during the first several years after annexation.
A third scenario (See Option I11, Chapter II) is Cal Fire providing fire/EMS service in the initial years after
annexation, and then Cathedral City providing fire, EMS, and ambulance service from Fire Station 35
when revenues from growth in Thousand Palms can support these services. This option envisions City
Fire and Cal Fire eventually sharing Fire Station 35, an oversized station. The apparatus and crew capac-
ity of this station is detailed in Chapter I1.
It should be noted that particularly under Options I and III, as a backup to the Fire Station 35 engine com-
pany, there would be fire responses into Thousand Palms from both Cal Fire and Cathedral City stations,
either through an initial or backup response20. As a result, an automatic aid agreement or a complete
"boundary drop" would need to be negotiated between the two agencies, likely a statistically based cost
sharing agreement between Cal Fire and the City likely would need to be negotiated2t since there will be
more responses into this area from Cal Fire than from the City. In addition, dispatch issues would need to
be resolved as well.
It is recommended that, because of current aperational and revenue constraints, Option #2 be imple-
mented, possibly moving to Option #3 sametime in the future. If Optian #3 is pursued, operational and
�evenue issues would need to be resolved between the City and Ca{ Fire as the area develops and the
#ax base enlarges. The process of transitioning from Option #2 to �ption #3 could take several years,
possibly in the 10 — 15 year time frame, and possibly longer.
In reviewing the responses to the Plan of Services checklist, one shauld keep in mind the different sce-
narios under which fire, EMS, and ambulance service can be provided to Thousand Palms. in Options 2
and 3 the levef of service to the community will either be the same or improve. This is because the re-
sources in Thousand Palms will grow to the point of supporting four firefighter/paramedics on a Type I
Engine, whether staffed by the City or Cal Fire.
'g All entry level career Cathadral City firefighters are firefighterslparamedic.
20 The distance of the two agency's statians on the periphery of Thousand Palms are listed "rn the follow-
ing section.
21 Email, Assistant Chief Cooley, June 22, 2012.
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At buiid-out it is expected that either Cal Fire or the City Fire Department will provide fire, EMS, and am-
bulance service to Thousand Palms.
Current Service Provider
The current service provider is the Riverside County Fire Department through a contract with Cal Fire, the
state fire agency. The Department serves the Thousand Palms area, and the periphery of the cities of
Rancho Mirage and Palm Dasert, from Fire Statian 35. This primarily response service is with a Type I
Fire Engine, with three firefighters or firefighter/paramedics. They also provide apparatus from this station
to serve the regianal needs of the Coachella Valley, with a Breathing Support vehicle assigned to Fire
Station 35.
Location of the three near�est fire statio�ts, and their distance to Thousttnd Palms.
The primary response station is Fire Station 35 which is located in Thousand Palms. The other nearby
Cal Fire stations are Fire Stations 69, 71 and 81. Fire Station 69 is in North Rancho Mirage at 71751
Gerald Fort! Drive, and is 2.5 miles from the narthern portion of the annexation area. Fire Station 71 is in
North Palm Desert at 73995 Country Club Drive, and is 2.8 miles fram the central portion of the proposed
annexed area at Cook and I-10. Fire Station 81 is in North Bermuda Dunes at 37955 Washington Street,
and is 1.7 miles from the southern portion of the anne�ced area at 38th Avenue and Varner.
Cathedral City has three fire stations, 491, 412, and 413. Fire Station 412 is at 32-10Q Desert Vista Road,
near Ramon Road, and is 3.5 miles to the northern portion of Thousand Palms at Varner and 8ob Hope
Drive. Fire Station 413 is at 27610 Landau, and is 52 miles from Varner and Bob Hope. Fire station 411
at 36910 Date Palm is 5.7 miles from the northern part of Thousand Palms. Please see Map 1V-1 for the
location of the fire stations in and around Thousand Palms for both the Ciiy and Caf Fire.
Whc�t is the level of setvice siandard?
In a general sense, the level of service should be similar, whether response is by the City (Option 1 and
3) or Cal Fire (Option #2} since either agency will be responding from Fire Station 35 with a Type f fire
engine. It is expected that khe responses in either case will be in fess than 8 minutes for a fire emergency,
and 5 minutes or less in most emergencies. The respanse by Cal Fire currently is with a 3 person crew,
while the City wil! respond with a 2 person engine crew, plus a 2 person crew from the ambulance, when
it is not otherwise engaged. It is recommended that the City contract with Ca( Fire to provide fire service,
with the City considering providing senrice when the tax base expands in Thousand Palms and can sup-
port an extra firefighter. �ue to staffing, operatianal, and dispatch issues, however, the City could be wefl
served by continuing the contract with Cal Fire for the duration, even to build out.
For ambulance service, the City provides a 2 person crew with firefighferlparamedics, and the County
provides service to this unincorporated area through a contract with AMR, which includes one paramedic
which is not a firefighter. For a majar medical emergency, the Cify would be able to supply four firefight-
edparamedics (two from the ambulance; two from the fire engine} in mosf cases when fire engine is nat
otherwise engaged. A backup engine or ambulance would be dispatched from the nearest station to pro-
vide staff in those cases. It is recommended, however, that initially emergency medical response be pro-
vided by either Cal Fire or AMR.
What are the actual average response times?
The average response time to an emergency should be 8 minutes or less as a goal, but often is 5 minutes
or less. There should be no reduction in response times, whether the response is by the City or by Cal
Fire.
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Equipment/staffcng at eaeh station.
The equipment and staffing assigned to the Cal Fire Stations in and on the periphery of Thousand Palms,
and which occasianally respond to calis in Thousand Palms, either initially or as backup, include:
• Fire Statian 35: Type 1 fire engine, with crew, and a Breathing Support Unit (often referred to as a
Light and Air Unit} with crew.
• Fire Station 69: 7ype 1 fire ertgine, with crew, a medic ambulance, with crew, and a reserve med-
ic ambulance.
• Fire Station 71: Type 1 fire engine, with crew, a medic ambulance, with crew, and a reserve Type
1 fire engine.
• Fire Sfation 81: 7ype 1 fire engine, with crew, HazMat response unit, a HazMat Squad, a reserve
HazMat Squad, and a HazMat support trailer. The fire engine and HazMat units are crossed-
staffed along with a HazMat Captain and Engineer, providing a minimum of five staff on duty dai-
ly.
New Service Provider .
Lacation of the three nearest fire stations to the affected ar�ea.
Again, the primary response station under any of the khree scenarias described above is Fire Station 35
which is located in Thousand Palms. The other nearest stations are Cathedral City Fire Station 412 (3.5
miles from the northern part of Thousand Palms), County Fire Sfation 69 (2.5 miles from the northern por-
tion of Thousand Pa[msj, County Fire Station 71 (2.8 miles from the central part of this community), and
County Fire Station 81 (1.7 miles from the southem portion of Thousand Palms).
The fire stations currantly operated by Cathedral City are Fire Station 411 (downtown station) located at
36913 Date Palm Drive, Fire Siation 412 (headquarters station), located at 32100 Desert Vista Road, and
Fire Station 413 (freeway station), located at 27610 Landau Boulevard. Station 411 is 5.7 miles from Var-
ner and Bob Hope Drive in the northern portion of Thousand Palms. Station 412 is 3.5 miles from this in-
tersection and station 413 is 5.2 milss from this location. Again, please see Map IV-1 which shows the fire
stations of the City and Cal Fire in and near Thousand Palms.
Wltat is the Level of Service?
The leve! of service should remain unchanged if the recommendations of this report are followed, specifi-
cally that current service providers (Couniy Fire through Cal �ire, and AMR) continue to provide service to
Thousand Palms. Over time, ifi it makes economic, service and logistical sense, the City and Cal Fire
might discuss co-locating in Fire Station 35, or the City continuing a contract with Cal Fire for fire service.
By this time there should be ennugh resources to support four firefighters assigned to a Type !-Engine for
initial fire attack or medical emergency whether service is provided by the City or Cal Fire. Also, whether
the engine is stafFed by the Ci#y or Cal Fire, there is enough roam to place a Ca! Fire unit at the station in
addition to the Type I-Engine. Since this decision would be made a number of years from now, there
would be a substantial period of time to resolve any financial and dispatch issues if the Ci�y operated the
Type I-Engine.
If in severa! years the City provided ambulance service to Thousand Palms, ihere will be two firefight-
er/paramedics to respond to medical emergencies, With the Type 1-engine on the scene as well, there
would be 5— 6 firefighter/paramedics to,address a major medical emergency since by that time the City
would be able #o support either 3— d or 4— 0 staffing on the fire engine.
The level of service to areas on the periphery of Thousand Palms should remain unchanged during the
initial years after annexation, if the City contracts with Cal Fire for fire/EMS service. The level of service
should also remain unchanged if the City assumes the role of fire/EMS seruice provider, but only if an
automatic aid agreerr�ent between the City and the County is in place, or a full "boundary drop" is negoti-
ated. Any such agreement likely would need to be supported by a cos# sharing agreement, based upon a
statistical analysis of the mutual benefits to the two agencies at that time. Finally, dispatch issues would
need to be resolved. These issues would not likely to be addressed for several years, say in 10 - 75
years, after annexation depending upon Thousand Palms growth rate.
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What are the actuat response times?
!n responding to an emergency, the average response time goal is 8 minutes or less. More often, the re-
sponse time will be 5 minutes or less. There should be na reduction in response times to Thousand
Palms, whether the response is by the City or by Cal Fire.
Eqr�ipment ut each station
The equipment assigned to Fire Station 35 in Thousand Palms is a Type '1 fire engine and a Breathing
Support apparatus, often referred to a Light and Air Unit. !f and when the City provides service at this Sta-
tion, there would be assigned a Type 1 fire engine, with crew, and a medic ambulance, with crew.
The equipment assigned to the Cathedral City Fire Stations inciudes:
• Fire Station 411: A Type 1 fire engine, medic ambufance, and a reserve medic ambulance;
• Fire Station 412: A Type 1 fire engine and two reserve medic ambulances; and
• Fire Station 413: A Type 1 fire engine, a reserve Type 1 fire engine (OES), and a medic ambu-
lance.
The City is currently purchasing a Type 1 fire engine which will be delivered in April. At that time one of
the current Type 1 engine will be placed in reserve.
What addatianal fc�eilities and persvnnel will be required to maintnin tfte eristing level of ser-
vice? If required, how wilt these facilities and personnel be financed?
The basic facility, equipment, and staffing infrastructure to service Thousand Palms now and in the future
are already in place. Exceptions to this are plans already in place by both agencies for the construction of
future fire stations. Cathedral City plans to construct a fire station in its "North City" planning area immedi-
ately north of Thousand Palms. This station and equipment will be financed by developer exactions and
staffing will be funded by tax revenue produced from "North City" when it develops.
County Fire (Cai Fire} when they prepared the "Thausand Palms Response Overview — C" shows a future
fire station in Palrrt Desert, just on the other side of the freeway from Thousand Palms, southerly of the
Cook Street/1-10 interchange. It appears that abaut 40% af its initiai response area would be to the middle
partion of Thousand Palms.
If Cathedral City annexes Thousand Palms and if this Pa{m Desert station is constructed, then there may
be a need for the two cities to discuss shared canstruction costs. If a shared construction agreement is
not negotiated, Cal Fire and Palm Desert may seek another site for the station. However, Cathedral City
should be able #a share financing a portion of station construction and equipment, if necessary. The City's
share would be paid for by the developers benefitting from this station, either through the City's Building
Development Fees, developer exactions, or by an assessment district far this and other infrasfructure im-
provements. Any shared staffing expense shouid be funded through taxes produced by new deveiop-
ment.
Identify any frre service inter-agency agreemercts that would apply to the annexation area.
There are potential fire servicelEMS inter-agency agreements which would be required if Thousand
Palms were annexed by Cathedral City. The nature of these agreements would depend upon which fire
service option is pursued and adopted.
If, in the initial years af annexation, fire service is provided by Cal Fire and ambulance service is offered
by either Cal Fire or by American Medical Response, the following agreements would need to be devel-
oped:
1. An agreement between the City and Riverside County, or possibly Cal Fire directly, to provide
fire service to Thousand Palms. lt is assumed that the service level will be at its present level
and generafly at the cost estimated in this report's fiscal anaiysis.
2. An agreement with Ca! Fire, or American Medical Response, to provide ambulance service.
Contracting with Cal Fire could be the preferred option since they already provide ambulance
service under contract with other cifies in the Coacheila Valley. 7he advantage of contracting
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thrnugh the County for service by AMR is that there would be no cost to the City for this ser-
vice. In any case, the City should maintain control over the provision of ambulance service in
the newly annexed area thraugh a service contract in order to maintain the City's current am-
bulance service. By so doing, the City will be able to provide ambulance service to Thousand
Palms in the fu#ure as discussed in other portions of this report.
A potential cost sharing agreement with the City of Paim Desert fo� the construction and pos-
sible operation of a fire station which would partly serve Thousand Palms.
If, at some point several years from now, the City provides direct fire and ambulance service ta Thousand
Palms, the following agreements likely wilt be necessary:
An automatic aid agreement, or even an agreemeni to secure a boundary drop, for those ar-
eas served by Cal Fire to serve not only Thousand Palms, but areas on the periphery of this
community. In turn, this will enable responses from stations on the periphery of Thousand
Palms into Thousand Palms. This agreement should include a cost sharing formula with the
County Fire depending upan the mutual benefit of this agreement between the two agencies
at the time the agreement is negotiated. Also, the dispatch issue would need to be resolved.
2. A potential cost sharing agreement with the City of Palm Desert for the construction and pos-
sible operation of a fire statian which would partly serve Thousand Palms.
As indicated in Chapter Ill whether fire service is provided by the City or Cal Fire, at build out there should
be enough resources to support 3— 0 or 4— 4 staffing of the Type-1 fire engine as well as staffing an am-
bulance at Fire Station 35, and to pay for 40% of the constructian and operational cost of a future Palm
Desert fire station which woufd partially serve Thousand Palms.
Animal Sheiter/Contral
The current shelter and animal control services are provide through Riverside County Animal Control Ser-
vices. ln fact, the animal shelter for the Coachella Valley is located in the Thousand Palms community at
72-054 Pet Land Place. What wili change upon annexatipn is that the City will need to contract with the
County Animal Control for shelter and field services. As explained in Chapter II, it is expected that the
cost af this service initially wiil be $70,000. This should preserve the current level of service to the com-
munity, and will equal or exeeed the level of service currently provided in Cathedral City.
Utilities
One purpose of the Plan for Services is to determine whether there will be adequate service to the area
proposed for annexation, and whether there would be a reduction in service to the area. In connection
with utility services, they are currently being provided to the Thousand Palms community either through
the Coachella Valley Water District (water, sewer, and drainage), the Imperial Irrigation District (electrici-
ty), or Southern Califomia Edison (gas). A summary of these utility services, including water, sewer,
drainage/flood control, electricity, gas, and solid waste collection, are summarized in this section. It
should be noted that most of the information in this section is from the perspective that there will be no
change in the service provider, but there eventually could be a change in land uses.
Water
The Coachella Valley Water District provides water, sewer, and flaod control service for the Coachefla
Valley, including Thousand Palms. A map fram the District's recently completed Water Master Plan Up-
date outfines the District's boundaries is shown in Map IV-2.
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Far water service, the Thousand Paims community is served by the Coachella Vailey Water District most-
ly from wells southwesterly af the I-10 freeway, although there are some wells in this unincorporated area
as well. In the future, the District plans to construct a 10 million gallon reservoir immediately north of the
Thousand Palms area. Further to the south, in the Classic Club area, a 24" water line has been installed
to serve this facility from the other side of the I-1 p.
Recently, the District completed and adopted the "2010 Coachella Valley Water Management Plan Up-
date," which laoks at and plans for the Valley's water supply for the next 35 years. Successful implemen-
tation af this Plan, which anticipates major future growth, should enable the Thousand Palms area and
the rest af the Valley to have a su�cient source of water during #his time period.
Ta provide the water supply for future development of the Thousand Palms community, develapers will be
required ta instail needed faciiities for their area related to water storage and distribution. They will also
be required to pay an infrastructure charge and a supplemental water supply charge. Together, water and
sewer charges currently amount to $10,000 -$12,000 per residentia! iat (.25 acre). A developer will re-
ceive credits against these fees far any basic water infrastructure improvements constructed in advance
of their normal installation.
These fees and improvements are usually considered the normal "cost of business." They often are fi-
nanced by various bonding mechanisms, such as assessment districts ta serve the area being devel-
oped.
Since the area being annexed is being served by an existing water district, further information for water
service fram the LAFCO Plan of Services Checklist does not need to be provided. This Plan of Services
does not recommend any change in the water service provider to Thausand Palms.
Sewer (Wastewater} Services
The Coachella Valley Water District also provides sewer service to the Thousand Palms community. The
main trunk sewer starts at Bob Hope Drive and flows to Sewer Treatment Plant #7 in Indio. This plant has
a capacity of 5,000,000 gallans, but its capacity could be easily upgraded if and when needed. Also, as
growth occurs, there may be a need to upgrade the main trunk sewer line. In the future, there will be a
need to construct a new main trunk sewer from Desert Hot Springs to Rio del Sol.
A builder constructing new deve[opment in Thausand Palms will be required to canstruct needed sewer
lines to connect to the main sewer as well as to pay a Sanitation Capacity charge. As some individual
residential lats have been constructed, septic tanks have been allowed to be installed in this area.
Basically, through the District's facilities, the current and future 7housand Palms comrnunity can be
served by the District.
Similar to water service, since sewer service will continue to be provided by the existing water district,
additional information required by the LAFCO Plan of Services Checklist does not need to be provided.
The Plan of Services for Thausand Palms does not recommend any change to the provision of sewer or
wastewater services to the area proposed to be annexed.
Drainage/Flood Control
The Coachella Valley Water pistrict has spent the past 15 years working with the U.S. Army Corps of En-
gineers to develop a master drainage plan for the 7housand Palms area. The design of this plan is esti-
mated as 90% complete. Recently, the District took over total responsibility for completing the design of
the plan, and it is anticipated that the design and related environmental documents will be completed dur-
ing the next 12 —18 months.
The entire Thousand Palms area is in flood zones of one, two, or three feet. So, currently, if a person de-
sires to build a new home, they must elevate the building pad, the height of which depends upon which
flood zone in which they are located. The construction of a major new development will require elevation
of the entire building site as well as allowing the flow through �f surface water drainage. This is similar to
what was required southeast of this area in Palm Desert Sun City, where the golf courses act as ffood
control channels, accepting surface water runoff and allowing it to flow thraugh the project.
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The flood control project for Thousand Paims, based on a 100-year flood event, is estimated to cost
$70,Q00,000. It will consist of le�ees and excavated channels, beginning at Ria del Sol, and stretching to
the Mirasera Flood Control Channel at Avenue 38. Reach 1 Levee wilf stretch from Rio del Sol just past
Vista De Oro, north of 30`" Avenue. Reaches 2 and 3 are east of Vista del Oro, and will cover the areas
no�th and south of Ramon Ftoad, down to Cook Street and Calle Tosca. There, storm water will flow
through an excavated channel past Xavier School to the Classic Club Golf Course. Past the galf course
there is the Reach 4 Levee and excavated channe( to the Mirasera Flood Control Channel.
The construction timing of this flood control project is unknown, since its implementation depends on
funding. Likely, it would be financed by federaf funds as well as some measure of the districYs property
tax revenue. In the meantime, storm water drainage can be accommodated following the rules and re-
quirements of the Water District.
There are np requirements in ihe LAFCO Plan of Services Checklist for providing the service of storm
water runoff protection. Nevertheless, the current provision drainage for this area is described in this Plan
of Services. The Plan does not propose any change in the cantrol or autharity over storm water runoff for
the Thousand Palms community. This responsibility will remain with the District.
Electricity
The Imperial Irrigation District (IID) provides electrical service to portions of ihe Coachella Valley, with the
rest of the Valley served by Southern California Edison. This service authority is based on a 1934 agree-
ment between Ild and the Coachella Valley Water District.
As can be seen on the following map entitled, "Imperial Irrigation District, Coachella VaBey Service Area
Map," there are three service areas in the Valley. Service Area 1 includes Thousand Palms sautheasterly
of Rio del Sol. The area northeasterly of this road will be served by Southern California Edison. It appears
that current and future electrical service will be available to the unincarporated sphere area of Cathedral
City now and at build-out.
The LAFCO Plan of Services Checklist does not require any additional information if there is no proposed
change in the service pravider, which is the case for the provision of electrical service.
Natural Gas
Southern California Gas Company (5oCalGas) provides gas service to most of Sauthern California, in-
cluding the Thousand Palms community. Serving nearly 20,000,000 people, this utility has the capacity to
provide current service to this community as well as the ability to provide service to future development.
The LAFCO Plan of Services Checklist does not mention the pravision af natural gas to annexed areas.
This Plan of Services, however, identifies the current service provider, and, of course, recommends that
no change be made in the provision of this service to Thousand Pa1ms.
Solid Waste Collection
Garbage collection in both Cathedral City and Thousand Palms is provided by the Burrtec Corporation.
The company has a landfill in Salton City, and transfer stations in the Cities of Coachella and Cathedral
City. This latter facifity is located near Thousand Palms at 70-100 Edom Hill Road.
Since na change is proposed in #his Pfan for Services far solid waste collection, additional information
regarding this service is not required by the lAFCO Plan for Services Checklist.
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Maintenance Services
Street Maintenance/Street Sweeping
Currently, street maintenance is provided by the Riverside Counry Transportation Land Use Agency. Cur-
rently, they provide a basic level of service far 49 miles af streets in this unincorporated area.
With this prospective annexation, the City would assume street maintenance which would be funded by
state gas tax and Measure A funds produced from this area. !t is estimated currently ihat $358,289 will be
avaifable from these sources to maintain the area's roads upon initial annexa#ion. It shouid be noted that
street medians (Ramon Road} and sfreet lights will continue to be maintained by the Recreation District.
A street condition "windshield survey" was conducted by graduate students from California State Universi-
ty, San Bernardino22. This information will be folded into the Cify's inventary of street candifions #or the
existing City, if annexation occurs.
City funding for street maintenance wil! pay for basic street and sign maintenance, including traffic signal
maintenance, if annexation occurs, This will include the funding of two Street Maintenance Workers as
well as street maintenance services provided by contract.
The annexation will eventually provide road improvements to this cammunity as developers propose and
construct projects which will require expansion or extension of existing roads or the construction of new
roads. In the future, interchanges affecting this area will be constructed alang the I-10 corridor at Portoia
and Da Vall, using local and regional funds. Per the CVAG Master Plan all improvements funded by this
Plan, including the two interchanges mentioned in this report, will be constructed by 2Q38.
Current Provider
Street maintenance is provided by f2iverside County. The County maintains a current road inventory sys-
tem. Based on that sys#em, khe County provides street maintenance as needed, except for Street lights
and street medians on Ramon Road which are maintained by the Qesert Recreation District f�om funds
from a landscaping and lighting district. Presumably sfreet maintenance is funded by County gas tax
funds.
Street sweeping is presently provided by the County. This service is funded through CSA 152.
New Service Frovider
Except for maintenance of street lights and street medians which is provided by the Desert Recreation
Dis#rict, the City expects to provide street maintenance at the current service level, in additian to securing
the County raad inventory, this information was supplemented by a street condition "windshieid survey"
conducted by graduate students at Califiornia State University, San Bernardino as was just mentioned.
Funding will not only provide for road maintenance, bu# maintenance and operation of #he traffic signals
as well_
Regarding street sweeping, in the existing City, both arterial and residential streets are swept monthly.
The artarial street sweeping is administered by the Coachella Valley Association of Governments (CVAG)
with funds the City receives from the Air Quality Fund. Residential street sweeping is provided by Burrtec,
the solid waste service provider, through their contract with the City. Both Burrtec and CVAG contract with
the firm, Clean Streets, ta sweep streets in Cathedral City.
Either the Burrtec contract would extend the service to Thausand Palms if that area were annexed, and
the City could obtain additional grant funds for arterial sweeping, or funding through CSA 152 will be used
for this service.
Street maintenance will be funded by increased City gas tax funds and Measure A funds as a result of the
annexation, The annexation will result in road improvements as new development occurs. Portions af ma-
z� "Thousand Palms Project," My�es Foster Barter, Christina Salazar, Emmanuel Sarpong, 2012.
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jor arterials such as Varner Road and Ramon Road will be widened as a result of new development, and
new streets will be constructed to serve new subdivisions, business parks and commercial projects. Over
time, regional and local funds will be used to construct two new freeway interchanges at I-10 and Portola
and I-10 at De Vall.
Upan initial annexation, street, sign and signal maintenance wiN be provided by the City. Much of this
work will be performed by contract, but 2.0 FTE new street maintenance pasitions would be created and
would be devoted to provide street maintenance service to Thousand Palms.
Lighting and Landscaping
Limited iighting and landscaping services are provided in Thousand Palms. The Desert Recreatian Dis-
trict administers a beneficial assessment district which funds the maintenance of a median landscaping
along Ramon Road between Varner and Monterey. It also pays for the maintenance and operation of 239
street lights in the community.
As painted out elsewhere in this P1an for Services, the landscaping and lighting functions takes only a
small part of the funding from the assessment district. The main focus of the assessment district is to fund
the maintenance and operation of the park and community center.
The Plan for Services recommends that there be no change in the service provider for this limited lighting
and fandscaping service. If the annexation occurs, however, ihe District and City should explore whether
it would be mutua{ly beneficial for the City to provide #his maintenance activity, since the City has staff
already performing #his type of work in the existing Cathedral City.
Leisure Services
In response to LAFCO's Plan af Seroices Checklist, the required information for �eisure services, such as
parks, recreation, and library, is provided in the following section.
Parks and Recreation
The current service provider for parks and recreation services in Thousand Palms is the Desert Recrea-
tion District, also previously known when it was created in 1950 as the Coachella Valley Recreation and
Park District. The District has a Sphere of Influence of 1,800 square miles and serves approximately
275,000 people. It serves 16 communities, including Thousand Palms, with a service area ranging from
Bob Hope Drive on the north to the Salton Sea on the south.
The District is funded by program revenue (34%), property taxes {32%), benefit assessment districts
(13°/a), and other revenue sources (21%)23.
In Thousand Palms the District operates and maintains a community park and community center at 31-
189 Robert Road. The land for the park is owned by the Palm Springs School District, with the improve-
ments owned by the District. The improvements were funded by the Riverside County Economic Deve!-
opment Agency. Immediately ta the north of the park, Legacy Nomes is dedicating an additional 13 unde-
veloped park acres, although basic infrastructure to support park developed is in place such as water,
sewer, and sidewalks.
The currently improved park consists of softball fields with soccer field overlays, and a limited number of
picnic benches. The community center is open Monday — Friday from 8:00 a.m. — 5:00 p.m., and fee
based classes are held at this location as well as community meetings.
The basic cost for the operation and rnaintenance of the park and community center is from a Thausand
Palms based benefit assessment district. The assessment district not only provides for the operation and
maintenance of the park and community center, but also provides funding to maintain the median on Ra-
mon Road from Varner to Monterey, and ta maintain and operate 239 street lights.
Z3 Coachella Vafley Recreation and Park Districi Master Plan.
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Cathedral City has a limited recreation and park functio.n. This function is restricted to maintaining cerfain
park facilities in the City funded by Landscaping and Lighting Districts. The City does not directly operate
any recreation programs, with that function assumed by volunteer organized sporis programs, such as
AYSD soccer.
Upon annexation of this area, the City could assume the Qistrict's share of the property tax in Thousand
Palms, and could operate the facilities using that tax as well as funds from the benefit assessment district.
Since the City, howe�er, daes not have the "organizational infrastructure" to oversee and administer basic
recreation programs, and the District has a well established parks and recreation function, #his Plan of
Services recommends that the Desert Recreation District continue ta provide parks and recreation ser-
vices, including administering the corr�munity park and community center, and maintaining the Ramon
F2oad median strip and the area's street lights.
As new development occurs, based on this recommendation, there is the issue of whether the District or
City's park standards and fee structure would be used in obtaining park ►and and improvements from de-
velopers. The Dis#rict's practice is to defer to the standards and fees of the City in which the improve-
ments will be constructed. In other words, the City wouEd be responsible for accomplishing new park facili-
ties through developer fees, dedications, and exactions, and then turning those improvemen#s over to the
District for administration and operation. The City has an advantage in achieving these improvements in
that it is not limited to only to provisions of the State Quimby Act like the Recreation District. The City also
has the ability to charge Development Impact Fees for park and ather improvements, which authority the
District does not have. These fees are listed on Tables II-C and II-D in Chapter 11. Aiso, as pointed out in
Table III-F, the Thousand Palms area would produce a significant amount of one-time revenue for parks,
community centers, and swimming pools.
Library Services
Library service is provided both to the City of Cathedral City and the Thousand Palms community by the
Riverside County Library System. The City's library is located at 3352Q Date Palm Drive, and is open dai-
ly except Friday, for a total of 44 hours a week. The siie af the library is 20,000 square feet and it con-
tains approximately 81,OOQ volumes.
The Thousand Palms library is focated at 31189 Rober� Road, and is apen every day except Friday and
Sunday, for a total of 40 hours a week. The library has 4,500 square feet. Both libraries use the same
catalague system. .
Since the two branch libraries are operated as pari af the iarger County Library System, and since it likely
would not be cost effective for the City ta create its own library department, the Plan of Services recom-
mends no change in the service provider for Thousand Palms.
Schools
Public schools are provided by the Palm Springs Unified School District (PSUSD) to the Thousand Palms
community. There are also private schools in the area, such as Xavier High School.
In Thousand Palms, PSUSD staffs and operates the Deila S. Lindley Elementary School. The area is also
served through the 12t" grade at other schools within the District.
Regarding developer impact fees for pubiic schools, after June 23, 2012, the PSUSD fees will be $.51 per
square foot for commercial development, $3.44 per square foot for new residential, and $3.20 per square
foot for additions to existing residential structures of 500 square Peet or mare.
It appears that PSUSD has the authority, capacity, and funding to provide public elementary through high
school educatian ta the Thousand Palms community, now and in the future. LAFCO's Plan for Services
Checklist does not require the provision of information about education. This basic information, however,
is provided due to the size of the prapased annexation.
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Summary
In the follawing table, the various services currently provided to Thousand Palms are listed, indicating
whether the current service pravider will continue to provide that service, or whether Cathedral City will be
the new service provider.
continue current
Service Rrovider
Yes j Na
� Public Safety
� Police Protection
� Fire Protection
j Animal Control
� Utilities
I Water Seroice
� Wastewater
� Flood Control
� Electricity
� Natural Gas
✓
✓
✓
� Garbage Collection
� Maintenance
IStreet Maintenance/Street
Sweeping
� Lightinq/Landscaping
� Leisure Services
� Parks and Recreation
Library Services
3chaols
Financial Services
Carrent Praviders
Current Provider
Counry Sheriff
County Fire (Cal Fire}
County Animal Control
✓ I Coachella VaUey Water District
✓ Coachella Valley Water Distriet
✓ Coachella Valley Water District
� Imperial Irrigation District /
Southern California Edison
� Southern California Gas Com-
pany
✓ Bu�rtec (franchise agreement)
✓
✓ �
✓ �
✓ (
Desert Recreation District
County Library System
Palm 5prings Unified Schoal
District
t�ew Provider
(if appiicable�
Cathedral City
Cathedral City
Services provided by the County to Thousand Palms are financed by various general revenues received
by the County such as property fiaxes, sa(es taxes, and the structural fire tax. There are also speciai rev-
enues which suppo�t street maintenance such as gas tax funds and Measure A funds.
The Desert Recreation District maintains the park, community center, street fights, and the median on
Ramon Road as well as operates programs at the park and community center. This main#enance and
programming is funded by a beneficial assessment district.
Other serviceS, such as various utilities, are supported by various fees and charges.
New Service Pravider
The general taxes which would be received by the City if if annexed Thousand Palms include:
• The City's share of the property tax per the Master Property Tax Agreement with the County;
• Structural Fire Tax;
• Property 7ransfer Tax;
• Property Tax In-lieu Vehicle license Fee;
• Sales 7ax;
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Oesert Recreation District
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• Utility Use Tax;
. Franchise Fee;
+ Fines and Forfeitures; and
• iransient Occupancy Tax.
The level of these taxes for those living in Thousand Palms wili remain the same upon annexation. Fiow-
ever, new to this annexed area are the fo{lowing taxes:
. Transactions and Use Tax which imposes a 1% transaction and use tax on City retailers. This
was approved by the Cathedral City vaters in June 2010, and expires September 2015, unless
extended by the electorate. The projections in this report assume that it will not be extended.
• A 3°/a utilities users tax which is applied ta the use of telecommunications, cable, electricity, gas,
and solid waste seNices. This was approved by the efectorate in 2008.
In terms of special assessments, such as those which accrue ta the Desert Recreation District, this Plan
of Services does not propose a change in these assessments or the cantinued flow of fhis revenue to the
District.
In terms of current bonded indebtedness applied to the unincorporated area, it would continue even if the
area were annexed to the City. In terms of general bonded inclebtedness of the existing Gity that would be
extended to the annexed area, that would be a policy decision of the Ciry Council.
Overall, as pointed out in Chapter lII, at build out the City's General Fund aperating costs are projected to
be $15,544,683. With $23,429,068 in General Fund revenue, there would be an annual surplus of
$7,884,385 (See Table Ill — C). By adding restricted Gas Tax and Measure A funds to the operating ex-
penditures, the City's budget to service Thousand Palms would totaf $17,009,989 (See Table III — D). Fur-
ther, the City's Business Development and Development Impact Fees would produce significant one-time
revenues for capital projects related to interchanges and bridges, police and fire facilities, parks and rec-
�eation facilities, and City improvements (See Table I11— E and 7able CII — F).
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�hapter V
Annexation Process
The purpose of this Chap�er is to outiine the procedures required to annex the unincorporated portinn of
Cathedral City's Sphere of !nfluence, the area generally known as Thousand Paims. It is undetermined if
the City Council will approve submitting an annexation application for this area. This Chapter, however,
ouklines the steps that should be followed in case an annexation is pursued by Cathedral City.
The annexation process is controlled by the Local Agency Formation Commission (I..AFCO) of each coun-
ty. Established in 1963, LAFCOs have the authority to apprave annexations per Sections 56000 et. seq.
of the California Government Code.
Pursuant to Gavernment Code Section 56425, LAFCO is required, as a planning tool, to identify logical
municipal providers for areas throughout the County where services are currently provided or will be pro-
vided within the short and mid-term. As part of this process, LAFCO is required ta establish Spheres of
Influence (SOIy for afl cities and special districfs. In this connection, an January 27, 2011, and on Sep-
tember 21, 2011, the Riverside LAFCO approved two separate expansions to Cathedrai City's SOI to in-
clude the entire area evaluated by this report, and is shown on the map faund on Exhibit A in Chapter I of
this repart.
Regarding the annexation of property within the City's SOI, LAFCO's Policies and Procedures24 pro-
scribes in Section 2.3.8 tha# "LAFCO shall encourage a[I developed urban land inside a city's sphere of
influence to annex to the City."ZS
Further, Secfion 2.2.1 of LAFCO's Policies and Procedures provides, in part, that "... LAFCO wil[ evaluate
proposals for changes of organization with the follawing hierarchy in mind (in descending order of prefer-
ence)." This hierarchy provides, in order of preference:
1. Annexation to an existing city,
2. Annexation to an existing muitiple purpose or single purpose special district (paragraphs b
and c),
3. Formation of a County Service Area {paragraph d),
4. Encorporatinn of a new City {paragraph f), or
5. Maintaining an unincorporated community (paragraph g)2�.
It is clear according to LAFCO's adopted palicies that the first preference for annexing urban land within
an existing city's SOI is to that city. It is therefare appropriate to understand the specific steps that will be
necessary to achieve that annexation, if Cathedral City decides to pursue such a course of action.
Steps Toward Annexatio�
If the City of Cathedral City determines that it woufd be advantageous to annex the unincorporated area
in its SOI, in all or in part, the steps summarized in the following paragraphs would need to be followed. It
should be noted that LAFCO staff may vary these steps slightly based on the specific annexation pro-
posal. The following steps also assume that the City would be the applicant for the annexation.
The City mails a notice to interes#ed agencies at feast 20 days before the City Council adopts
a resolution to submit an annexation application to LAFCO.
24 LAFC� Policies and Procedures, Riverside Local Agency Formation Commission, August 26, 2004.
Zs lbid., p. 10.
zs Ibid, p. 7.
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2. The City resolution will include the fol{awing information and related materiafs:
• Resalution/Petition
• Map
• Pre-zoning
• Legal description
• Processing fees ($13,800, LAFC� processing fee; $1,OQ0 depasit, and $137/hour,
Coun#y Surveyor charge for reviewing annexation legai description; $3,500, 5#aie
Board of Equalization; possibfe miscellanous fees from the Registrar of Voters and
Caunty GIS)
• A Plan for Seroices
• CEQA documents, as applicable
+ Resolutions by the affected agencies (City and County} agreeing to a transfer/split of
the ad valorem property tax revenues generated in the subject territory
LAFC� reviews the application. This review includes:
• Deterrrtination that the application is complete
• Notice to the City that the application is complete or incompleke. In the latter case, the
City can revise the application to ensure that the application is cornplete to the
satisfaction of the LAFCO Executive O�cer.
4. After the annexation is determined to be complete, the following steps should be taken:
• LAFCO notices the County Assessor of the proposal
• The Assessor determines which Tax Rate Areas (TRA} are involved and calcula#es
the total assessed valuation {AV) of the afiected territory
• The Assessor issues a report of the TRAs a�d AV to the County Auditor
• The Auditor determines the total property tax revenues for the area proposed for
annexation and issues a report to the City and the County of the tota! revenues
involved27.
• The City and County are natified that they have 60 days to reach an agreement on
the transfer of property tax revenue from the County to the City, although the Master
Property Tax Agreement, if one exists for a particular city, can be used for this
purpose.
5. Upan determination by the LAFCO Executive Officer that the application is complete, the Ex-
ecutive Officer issues a Certificate of Filing and sets a hearing date for the proposed annexa-
tion.
6. A notice of Commission hearing is given by the Executive Officer by posting, publication to
property owners and registered voters within the boundaries of the area proposed to be an-
nexed at Ieast 21 days before the hearing date. If over 2,04Q notices are required, a 1/8 page
display ad may be used in lieu of rrtailed notice.
7. The LAFCO Commission holds a public hearing on the proposed annexatian, considering the
staff report, testimony of affected agencies and parties, the Plan of Service, and CEQA doc-
umentation. The Gammission may make the following determinations:
• Approve the application
27 This information has already been estimated as part af this report, however, the Auditor will complete
the precise and official final amount as part of the formal annexation process.
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• Approve the application subject to terms and conditions, or
• Deny the application.
8. Assuming that the Commission approves the application or appraves it subject to terms and
conditions, LAFCO adopts a resolution making these determinatians, approving the applica-
tion, and sending a copy of the resolution to the applicant, in this case, the City. The Com-
mission also directs the Executive O�cer ta conduct a protest hearing.
9. The Executive O�cer gives notice of posting, publication or mail ta p�operty owners and reg-
istered voters of a protest hearing at least 21 days before the date of the hearing.
10. The Executive D�cer holds a protest hearing. Written protests must be filed on a LAFCO
protest form with the Executive Officer prior to the conclusion of the hearing. The results of
the written protest wifl be determined by the Executive Officer within 30 days of the hearing.
11. The outcome of the protest hearing is determined solely by the level of written protest re-
ceived, as folEows:
• < 25% and < 25% landowner protest — the proposal will be completed without an
election;
If there is a 25 — 50% voter protest, or a 25% or more landowner protest, the
proposal will be ordered subject to an election canducted by the City;
• If there is a voter protest of 50% or mors, the proceedings will be terminated.
12. If any of the conditians in Step 11 are met, an election is held among the registered voters in
the subj�ct area on�y, and not within the existing City.
13. If the majority of voters approve the annexation, LAFCO sends a Certificate of Completian ta
the County Recorder's Office, and upon saiisfaction of all terms and conditions specified in
the Commission's Resalution. The annexation is complete upon recordation of the Certificate
of Completion.
14. If there is insufficient protest to force an election, or if the voters approve the annexation,
LAFCO then sends the Certificate of Completion to the County Recorder's Office, and upon
satisfaction of all terms and conditions specified in the Commission's Resoiution. The annex-
ation is complete upon recordation of the Certificate of Completion.
These steps to achieve annexation of the unincorporated area in Cathedral City's SOI assume that there
is an affirmative action taken during each step of the process. Obviously, there are other actions which
may be taken during this process, which may delay or stop the annexation.
To more fully understand the options that may occur during this process, please see Chart V-I, which pre-
sents a procedure diagram for annexations in accardance with the Gortese-Knox-Hertzberg Local Gov-
ernment Reorganization Act of 2000.
A further complexity to this process is the enactment during 2011 of SB 244. This new law requires the
inclusion of an adjacent "disadvantaged unincorporated eommuniiy" (DUC} as part of any proposed an-
nexation. So, if an annexation is proposed, and there is an adjacent, unincorporated inhabited area with
12 or more registered voters where the community average median household income is below 80% of
the statewide annual median income,2B whici� is the definition of a DUC, then the City must also propose
to annex the DUC as well. Under SB 244 the LAFCO Commission is prohibited from appr�ving the initial
annexation un[ess an application to annex the DUC has also been filed and considered.
Whife the Cammission is not required to approve the DUC as part of the annexation application review, it
empowers LAFCO to link the two decisions29. This adcls a further complexity to the review process, pos-
sibly increase the cost of annexations, making it more difficult for a City to pursue an annexation withaut
Ze Water Code Section 79505.5.
29 C&L Newsletter; Update on Public Law, Winter 2Q12.
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considering the needs of an adjacent unincorparated, disadvantaged community. Unfortunately, but pre-
dictably, this new mandate is unfunded by the State.
As it applies to #his proposed annexation, SB 244 may preclude khe City proposing to annex only a por-
tion of its unincorporated SOI. This is a very preliminary conclusion, however, since SB 244 has been in
effect for only a few months and the data and processes necessary to implement this law have not been
fully evaluated by LAFCOs statewide. Riverside County LAFCO has been attempting to identify "disad-
vantaged unincorporated communities" throughout the County. They are working with the Caunty's Cen-
ter for Demographic Research to determine the best manner to obiain pertinent income data for the mul-
tiple small areas where SB 244 might apply throughout the County. Preliminary infarmation released by
LAFCO seems to indicate that possibly portions of the City's SOI could be annexed rather than the entire
unincorporated Thousand Palms community.
Besides SB 244, one requirement of the initial LAFCO application is to "pre-zone" the area prior to con-
sideration of the annexation application by the Commission. The most expeditious mefihod to accomplish
pre-zoning is to use the existing County zoning. It should be noted, howevsr, that state law requires zon-
ing designated during the pre-zoning process remain in place for fwo years. Therefore, it may be benefi-
cial for the City �o pre-zone its unincorporated SOI before submitting an annexation application to reflect
the land use the Cify would like to see developed if the annexation process were successful. If the City
was genera[ly satisfied with the County znning, hawever, andlor did not expect that the significant amount
of vacant property in this area would see near-term development, use of County zoning could satisfac#ori-
ly meet the City's interests.
If a pre-zoning process is initiated, it is expected that any zoning plans will be reviewed by the Thousand
Palms Community Council.
Again, this chapter has presented the necessary steps for processing an annexation of its unincorporated
SOI area, if the City decides to pursue such an annexation. It is designed to be a guide for the process
which may be required if such an annexa�ion application is filed.
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Staff Report
Potential Annexation Areas North of 1-10
April 11, 2013
Page 2 of 4
During the last year, Cathedral City retained a consulting firm, Ralph Anderson &
Associates, to prepare a fiscal analysis for annexing all of the unincorporated lands
within their sphere of influence north of Interstate 10, which includes areas studied for
annexation by Palm Desert under Scenario B. On Wednesday, 27 March 2013, the
Ralph Anderson & Associates fiscal analysis was presented to the Cathedral City city
council during a study session held to discuss the potential annexation. The council
members directed staff to commence the process of applying to the Riverside County
Local Agency Formation Commission (LAFCO) to annex the areas shown in red here:
Thousand Palms
ty Annexat
A.«
O .r2013,Gocgle
0,F3ancho Mirage
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Klassen, ��I�ED �
From: p A�-H ���£��� �A�idy Hall [AHall@cathedralcity.gov]
Sent: M �ay, April 08, 2013 6:00 PM
To: 2�13 �PR -9 AM 8�,� an, Lauri; mrover@roverarmstrong.com; mgialdini@rcbos.org;
Dorian.Cooley@fire.ca.gov; Sonia.Cooley@fire.ca.gov; ps8888@msn.com;
willacker@aol.com; Wohlmuth, John; Rob@RobBernheimer.com; Leisa Lukes;
GSpiliotis@lafco.org; Greg Pettis (gregpettis.com); Stan Henry; Patricia Saleh
Cc: Klassen, Rachelle
Subject: RE: Annexation and Sphere of Influence Discussions
La u ri,
Thank you for providing a copy of the staff report.Without question, it is important for the City of Palm Desert to
consider the future growth and expansion of the community, and inclusion of areas in the Thousand Palms Community
Council Planning District is a very appropriate and timely issue. However,the staff report seems to imply that Palm
Desert would have options not available to the City of Cathedral City.
As you recall,the actions of Cathedral City were directed by LAFCO in response to a request to expand the city's Sphere
of Influence (SOI) and eventually annex the vacant land between Rio Del Sol and our current eastern city boundary (Da
Vall Road extended). It certainly seemed simple enough at the time; a simple exchange of property previously in the
Rancho Mirage S01 into the Cathedral City SOI,with the support of Rancho Mirage.The Thousand Palms Community
Council, Chamber of Commerce and several residents rose in protest claiming the expansion of Cathedral City to Rio Del
Sol (completely vacant property)would inhibit their ability to incorporate.After it was determined Thousand Palms
would not qualify to become an independent municipality, LAFCO emphatically directed Cathedral City to include the
entirety of Thousand Palms(with the exception of the MSHCP) in the S01 expansion in response to a request by the
Community Council and the residents to keep the community whole; rather than splitting it up into pieces resulting in
more than one municipality carving out the lucrative portions of the community and leaving behind the lower revenue
producing areas.
Unhappy with the decision of LAFCO,the Berger Foundation,with valid reasons, appealed the decision of the LAFCO
Board and the appeal was denied. Once again,the LAFCO Board strongly indicated the need to keep Thousand Palms
whole. Failure to include the decisions of LAFCO in the staff report might give the City Council the impression that
carving out the Berger Foundation and Xavier School would be permitted by LAFCO.Short of a double standard for one
community versus another,this would not be consistent with the initial decision or the appeal denied by the Board. If
LAFCO is so inclined, perhaps we should rethink our approach by seeking to annex only the high taxable or potentially
high taxable areas.
Another factor that probably needs to be reviewed is the proximity to disadvantaged communities. Should the LAFCO
Board determine it is now appropriate to only annex a portion of Thousand Palms,you may need to revise your request
to avoid being adjacent to any defined disadvantaged communities.That may be a difficult task in the Thousand Palms
area according to some of our preliminary studies.
Cathedral City and Palm Desert share an important and cordial relationship. It is critical that we continue to work
together on important issues such as the eventual incorporation of Thousand Palms. Either Palm Desert or Cathedral
City will likely be providing the municipal services to Thousand Palms at some point in the future. Whichever community
is tasked with that responsibility,they should be given the best opportunity to succeed without the other municipality
taking portions of the developable property that will provide the necessary revenues to provide the service.Therefore, if
the Palm Desert City Council determines it is appropriate for the city to consider annexation of the entire Thousand
Palms area, perhaps Cathedral City needs to discuss scaling back its current SOI so that you can provide effective
services all the way to Rio Del Sol.The economic feasibility study clearly indicates that without the Classic Club area and
1
the property of the Berger Foundation included in the annexation, providing municipal services to the area is not
feasible.
Again,thanks for the heads up and helping us work through this critical issue. Let me know if there are any questions I
can answer for you.
Andy Hall, AICP
City Manager
City of Cathedral City
ah all@cathedral c ity.gov
760.770.0391
From: laylaian@cityofpalmdesert.org [mailto:laylaian@cityofpalmdesert.org]
Sent: Monday, April 08, 2013 3:15 PM
To: mrover@roverarmstrong.com; mgialdini@rcbos.org; Dorian.Cooley@fire.ca.gov; Sonia.Cooley@�re.ca.gov;
ps8888@msn.com; willacker@aol.com; jwohlmuth@cityofpalmdesert.org; Rob@RobBernheimer.com; Leisa Lukes; Andy
Hall
Cc: rklassen@cityofpalmdesert.org
Subject: Annexation and Sphere of Influence Discussions
Greetings,
City of Palm Desert staff is asking for direction from the Palm Desert City Council regarding their intentions(or lack
thereof)for annexation of lands north of Interstate 10. This request for Council direction results from Cathedral City's
current consideration of annexation of all of their sphere of influence north of the freeway. The item is on the agenda
for the Palm Desert City Council meeting this Thursday, 11 April 2013, at 4:00 PM. You can find the Council agenda and
staff report by clicking on this link:
http://citvofpalmdesert.�ranicus.com/MetaViewer.php?view id=2&event id=3&meta id=17398. The staff report itself
is relatively brief, but there are almost 200 pages of attachments so give your computer a minute to load up the full
document.
If you have strong feelings regarding Palm Desert's future areas of incorporation, I suggest that you make your concerns
known by letter, email,telephone call, or in person at Thursday's meeting. You may forward any written
communications to the City Clerk,who will distribute them to all members of the Council. The email address of the City
Clerk, Rachelle Klassen, is RKlassenCc@cityofpalmdesert.or�.
Sincerely,
Lauri Aylaian
Director of Community Development
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
760.346.0611 phone
760776.6417 fax
2
Klassen, Rachelle
From: Hunley, Bill@CALFIRE [BiII.Hunley@fire.ca.gov]
Sent: Wednesday,April 10, 2013 9:56 AM
To: Klassen, Rachelle
Cc: Wohlmuth, John; LaCross, Mary; Cooley, Dorian@CALFIRE
Subject: Letter
Attachments: Letter opposing Annexation.doc
Rachelle,
Attached is a letter from Chief Hawkins that 1 would like to read into the record during tomorrows discussion on
the Cathedral City Annexation issue.Will you please distribute to the council.
Thank you,
Bill Hualey
Division Chief- D 1
West Desert Division
CAL FIRE/Riverside Co. Fire Dept.
77933 Las Montanas, Suite 205
Palm Desert, Ca. 92211
Office: (760) 393-3453
Cell: (760) 250-9369
www.rvcfire.or�
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RECEiV�� �N COOPERATION WITH
tT Y CL�R K� ����ORNIA DEPARTMENT OF FORESTRY AND FIRE PROTECTION
pARN a������ c�
John R. Hawkins � Fire Chief
2�13 APR i 0 A�I 9= 5� 210 West San Jacinto Avenue- Perris, CA 92570
(951)940-6900 -www.rvcfire.org
ROUDLY SERVING THE
NINCORPORATED AREAS
F RIVERSIDE COUNTY
ND THE CI77ES OF:
April 10, 2013
ANNING
EAUMONT
ALIMESA Honorable Mayor Harnik and Council Members,
ANYON LAKE
OACHELLA
The proposed annexation of the Thousand Palms community by Cathedral City
ESERT HOT SPRINGS
concerns the Riverside County Fire Department for the following reasons:
ASNA�E
lDIAN WELLS • We not believe the proposed annexation will be supported by revenues as is
,o�o suggested based on overly optimistic economic growth and the addition of new
JRUPAVALLEY hotels in the community.
• The Riverside County Fire Department operates an integrated, cooperative,
AKE ELSINORE
regional fire protection system that is strong due to the additive resources
'°Qu'"T'° provided by the cities, county and the state. Annexation of the area by
IENIFEE Cathedral City will seriously compromise the system, as follows:
IORENO VALLEY o Resources: Riverside County Fire operates 6 fire stations with 6 engine
oRco companies, 1 ladder truck, 1 hazmat response team and 2 battalion
ALM DESERT chiefs in the immediate community area and a total of 24 fire stations
with 24 engine companies, 2 ladder trucks, 1 hazmat response team and
ERRIS 5 battalion chiefs in the Coachella Valley. By contrast, Cathedral City
ANCHO MIRAGE currently has 3 engines assigned to 3 fire stations and is not part of any
ue�oouxcso regional response system. Today, Cathedral City relies on hazmat
AN JACINTO response from Riverside County.
o Staffin�: By Board and City Council policies,the Riverside County Fire
EMECULA
Department staffs all engines with 3 firefighters and all ladder trucks
/ILDOMAR with 4 firefighters. A confirmed fire 15t alarm response from the
Riverside County Fire Department totals 20 firefighters and a Chief
OARD OF Officer. Cathedral City currently staffs their fire engines with 2
uPERv�sot�s: firefighters making comparisons not equal. The current daily staffing for
EVIN JEFFRIES Cathedral City is a total of 10 firefighters. This includes the 4
DISTRICT 1
firefighter/paramedics that staff the cities 2 ambulances. This is a
�HNTAVAGLIONE si nificant difference that cannot be dismissed.
DISTRICT 2 g
=FF STONE o Dispatching Services: Riverside County Fire dispatches all emergency
D�SrRiCT3 resources from a central dispatch center at Perris and is able to support
�HN BENOR the regional response system with no need to relay response
DISTRICT4 information to another agency to support a mutual aid response. This
IARIONASHLEY significantly reduces delays in response.
DiSrRicT 5 o Re�ional Svstem: All after action reports following major fires
recommend regional response systems, not many independent entities.
• Provision of emergency fire services for the Thousand Palms community by
Cathedral City will seriously compromise response into the Cities of Rancho
Mirage, Palm Desert and Indian Wells.Just the need to relay dispatch
information to the Cathedral City dispatch center will delay responses to those
communities currently protected by the Riverside County Fire Department.
Additionally, the limited resources of Cathedral City will not support surge
capacity needs during multiple alarms which are common.
• As a follow up point to the aforementioned point, mutual aid cannot be used to
supplement responses that are the responsibility of another agency. This will be
the case if Thousand Palms is annexed by Cathedral City causing the Cities of
Rancho Mirage, Palm Desert and Indian Wells to regularly support Cathedral
City with responses into Thousand Palms.
• The Riverside County Fire Department does not agree with the annexation
report developed by the Cathedral City consultant. The report does not fully
explore the impacts of annexation nor propose all alternatives for fire and EMS.
We urge the City Council to either seriously oppose the annexation of Thousand Palms
by Cathedral City or consider annexing the same area. Either option will not
compromise the integrated, cooperative, regional response system provided by the
Riverside County Fire Department.
Respectfully Submitted,
John R. Hawkins, Fire Chief
Cal Fire/Riverside County Fire Department.
By: Bill Hunley, Division Chief
Cal Fire/Riverside County Fire Department