HomeMy WebLinkAboutReport-Terra Nova - Cat City Analysis of Thousand Palms Cmty�/_
CITY OF PALM DESERT
DEPARTMENT OF COMMUNITY DEVELOPMENT
STAFF REPORT
REQUEST: RECEIVE AND FILE TERRA NOVA PLANNING AND RESEARCH
REVIEW OF CITY OF CATHEDRAL CITY FISCAL IMPACT
ANALYSIS FOR THE THOUSAND PALMS COMMUNITY DATED
JULY 25, 2013
SUBMITTED BY: Lauri Aylaian, Director of Community Development
DATE: August 22, 2013
CONTENTS: Terra Nova Planning & Research letter dated July 25, 2013
Recommendation
By minute motion, that the City Council receive and file the report from
Terra Nova Planning & Research. This information will be available for use
when and if Cathedral City files an application with the Local Agency
Formation Commission (LAFCO) to annex the Thousand Palms area.
Background
The City of Cathedral City's sphere of influence borders on the City of Palm Desert and
on its sphere of influence. In the last year, Cathedral City has begun to study the
possibility of annexing their sphere of influence into their city limits. Toward this end,
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. On March 27, 2013, the Ralph Anderson & Associates
fiscal analysis was presented to the Cathedral City city council. 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 outlined in white on
the following map:
Staff Report
Review of Cathedral City Fiscal Impact Analysis
Page 3 of 3
August 22, 2013
The report identifies a number of reasons for the wide differences between the
Cathedral City Study and the Palm Desert Study. Chief among them are:
• The study areas were very different; fewer than 350 acres of Cathedral City's
9,700-acre study area were included in the Palm Desert Study. (The overlapping
study area is depicted in yellow on the map on Page 2.)
• The level of services provided by the City of Palm Desert is quite a bit higher,
and consequently more expensive, than Cathedral City's.
• Cathedral City assumes that almost three times the number of hotel rooms will
be built in its study area than Palm Desert assumes will be built in its own study
area. Additionally, the Transient Occupancy Tax (TOT) in Cathedral City is 12
percent, while the TOT in Palm Desert is 9 percent.
• The method that Ralph Anderson & Associates uses for calculating sales tax is
based on the population of Thousand Palms, rather than upon the amount of
taxable retail sales in Thousand Palms. Terra Nova opines that this
conservatively leads to a $600,000 over -estimate of sales tax revenue that
Cathedral City will receive upon annexation of Thousand Palms.
Staff requests that the members of the City Council receive, review, and file this report.
In the event that Cathedral City files an application with LAFCO to annex their sphere of
influence area, the information in the report can be used to craft a position statement for
Palm Desert to offer during the public hearings that would be held on the matter.
Fiscal Analysis
There is no fiscal impact to the City of Palm Desert associated with receiving and filing this
report.
Submitted By: Depa t Head:
Lauri Aylaian, Community Developmet (Di' au►ut ul S. Gibson, Director of Finance
val:
M. Wohlmuth, City Manager
CITY COUNCIL At iON
APPROVED ✓✓
RECEIVED OTHER
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ABSENT: Fr.
ABSTAIN:i
VERIFIED BY: Mx it/kJ'\
Original on File with City CI%,r c's Office
g:\planningUauri aylaian\staff reports cathedral city fiscal report review 8-22-13.docx
Staff Report
Review of Cathedral City Fiscal Impact Analysis
Page 2 of 3
August 22, 2013
Cathedral City Proposed
Annexation
s d (;)rzitark3
g Study Area
Because the proposed Cathedral City annexation area (outlined in white) shares
boarders with Palm Desert and its sphere of influence (outlined in red), the Palm Desert
City Council is necessarily concerned with the financial viability of such an annexation.
Palm Desert does not want a failing city as a neighbor, any more than Cathedral City
wants to financially fail.
Consequently, the City Council retained Terra Nova Planning & Research in May 2013
to review and analyze the Ralph Anderson & Associates study. They asked that the
information in that study be compared
dagainstorSunnmanldnlandsprovided
in a the west012 somecal
of
impact analysis prepared by Terra NovaCity
which overlapped with lands studied in Cathedral City's analysis.
Terra Nova's comparison of the two studies is now complete, and is presented with this
staff report.
g:\planningMaori aylaian'staff reports\cathedral city fiscal report review 8-22-13.docx