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HomeMy WebLinkAboutPD Golf Operations dba PDCC - Process to Form LLDCITY OF PALM DESERT CITY MANAGER'S OFFICE STAFF REPORT REQUEST: CONSIDERATION OF APPROVAL TO BEGIN THE PROCESS OF FORMING A LANDSCAPE AND LIGHTING DISTRICT FOR HOMES LOCATED ON THE FAIRWAYS OF PALM DESERT COUNTRY CLUB SUBMITTED BY: Ryan Stendell, Senior Management Analyst APPLICANT: PD Golf Operations, LLC, dba: Palm Desert Country Club Moe Sihota, Managing Director 77200 Califomia Drive Palm Desert, CA 92211 DATE: October 10, 2013 CONTENTS: April 11, 2013 Staff Report, Minutes, and Correspondence Recommendation By Minute Motion, deny the request to begin the process of forming a Landscape and Lighting District (LLD) for homes located on the fairways of Palm Desert Country Club (PDCC). Backaround At its meeting of April 11, 2013, the City Council heard a request from the ownership group of PDCC Golf Operations to begin the process of fo►ming a LLD to assist with the operations of the course. Many residents expressed concems over how this process would work and why the assessment was being sought. Managing Director Moe Sihota addressed the Council and concurred this should be a transparent process and offered to set up a website that would include the following information: • Easy accessibility from the PDCC website • Income and Expense Details (including all utility costs) • Corporate Structure (including owner names) • Q&A Page • Information related to the conversion of unused turf areas to desert landscaping The City Council ultimately continued the item until the first meeting in October to allow PDCC to prepare the website and have meetings with the community. Staff Report Palm Desert Country Club LLD October 10, 2013 Page 2 of 2 To date, staff has not been made aware that any of the items promised by PDCC have actually been implemented. Staff has continued to receive inquiries from concerned residents requesting the status of the website and community meetings. Staff has contacted PDCC regarding when the website and meetings would be available and have not received a response. Staff did meet with Mr. Sihota once this summer, at which time there was some concern about the viability of an assessment district vote. Staff has been supportive of this process to this point in order to allow the residents to weigh in on the future of their community. Based on the lack of communication from the PDCC ownership group and not following through with their proposed actions, staff is not recommending this process continue. Fiscal Analvsis There is no fiscal impact related to this project. Submitted By: — i Ryan Stendell Senior Management Analyst nager Revie ed and Concur: aul S. Gibson, Director of Finance CITY COUNCIL A�"iTION APPROVED � DENiED RECEIVED OTHER U -- -,=�/� �_ AYES�i� ' � NOES: ��' ABSENT; . l� � ABSTAIN: � VERIFIED BY: � Original on Fik wit6 City i 4fficl� MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 B. For Adoation: ORDINANCE NO. 1256 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIF�RNIA, AMENDING CHAPTERS 5.87, 5.90, 25.04, 25.10, AND 25.38 OF THE PALM DESERT MUNICIPAL CODE REGARDING MASSAGE ESTABLISHMENTS AND MASSAGE PRACTITIONERS. Councilman Spiegel recused himself from this item and left the Council Chamber. Councilman Tanner moved to waive fu�ther reading and adopt Ordinance No.1256. Motion was seconded by Benson and carried by a 4-0 vote, with Spiegel ABSENT. XIV. NEW BUSINESS A. CONSIDERATION OF THE APPROVAL OF BEGINNING THE PROCESS OF FORMING A LANDSCAPE AND LIGHTING DISTRICT FOR HOMES � LOCATED ON THE FAIRWAYS OF PALM DESERT COUNTRY CLUB (PD Golf Operations, LLC, d.b.a. Palm Desert Country Club, Applicant). Senior Management Analyst Ryan Stendell noted the staff report, supporting documentation, and correspondence from community members in the Council's packet. Some important key points were that tonight was not a vote to form a Landscape and Lighting District (LLD), but to consider whether to allow the process of formation to occur, which hinges on a vote of the community before the City Council could accept such an assessment district. Major questions by community members hinged upon community support and timing of the ballot. Staff recommended a 55% threshotd for approval, because staff felt that a large amount of community support should be there before taking on this process. Secondly, the timing of the ba�lots is a concern. Even though the assessed formation requires ballots to be mailed to mailing addresses wherever the permanent tax address would be, staff heard complaints that a summer time vote wasn't ideal. The staff report provided a time line with ballots going out in late May and the voting period going through the middle of July. However, the process can be postponed with the vote taking place in the next fall/winter when everyone was in town. Staff believes these are the two key issues with how to structure the matter if the Council wished to go through with the formation process and allow a vote to go out. He's had about �0 to 75 various contacts from community members in the last several weeks with the largest portion by phone calls, second by emails, and thirdly by letters; copies of emails and letters were provided in Council's agenda packet. The majority of emails and letters were negative with the two most common themes being that they liked what PDCC had done by getting the place opened, and the maintenance looked good, but they didn't feel taxation was the right way to go about it. The second theme r�� MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 was that it wasn't right in any shape or form to subsidize a private business. In conclusion, he noted the lengthy memo from Wildan Financial Services. He said staff believed the assessment district as proposed by Wildan could fit within the confines of the boundaries of the 1972 Act AD and Proposition 218. He said Wildan's report went into details on how that could happen, and a representative was in attendance to answer any questions. Additionally, owner representation for PDCC, LLC was in attendance and wished to make a statement. Mayor Pro Tem Benson said it would be helpful if staff explained the City's position, because what she has read in the newspaper was not true. She said it would be wise for the community to know the City was not promoting this matter. Mr. Stendell stated the previous owner of the golf course went out of business, and the golf course was not maintained for quite some time. Prior to purchasing the property, the current owners approached the various departments of the City doing their due diligence and going through the normal process, and they had inquired about a potential assessment district. Staff from various departments indicated to the current owners that no purchase should be considered based on an assessment district, because no guarantees could be given. The approach of the current owners at that point was to establish a track record with the community, demonstrate their long-term commitment, maintain the facility, and potentiaily later tatk about the formation of an assessment district. He said a bit of time has passed and the ownership has approached the City again inquiring about staff's position for formation of a Landscape and Lighting District (LLD). He said first and foremost staff wants to see significant community support, but if the City didn't have to be involved with this, it would surely be the best solution. However, based on community input, telephone calls, and his communication with the owners, staff has learned the HOA is fractured, it does not include the entire golf course; therefore, that option is out. Staff looked at a Community Facility District (CFD), which could work, but it wouldn't fit as well as a Landscape and Lighting District. It turns out that if there is community support for an assessment of some kind, a Landscape and Lighting District involving the City would be the only way to achieve it. Therefore, staff is here today asking whether or not the City should participate in that process. Councilman Tanner stated the Landscape and Lighting District requires an approval of 51%, but staff was proposing 55% of the baliots cast, and the Community Facility District (CFD) requires a 2/3 vote of the total. Mr. Stendell agreed, stating the two major differences between the CFD and LLD, is the simple majority versus 2/3 on the voting requirements. With the LLD, the ballots go to the registered property owner, where as with the CFD �7 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 the bal(ot went to the tenant. Further responding, he clarified that the votes are based on ballots received in both districts. MR. MOE SIHOTA, Palm Desert Country Club Managing Director, stated he would respond to matters that have been raised, but first noted that if there was a vehicle apart from involving the City, they would have preferred that as well. In fact, they would have preferred going through the HOA, but as staff indicated, the HOA didn't represent the entirety of the homes in the area; therefore, by law, the only other option was to approach the City to administer the vote. He said they were not asking the Ciry to take a position one way or the other, but simply asking for a vote to be held so that the community can express their opinion. The issue today, based on the staff report, is whether the Council should put the assessment question to a vote, which they think it should. They are fully aware of the strong opinions on both sides with regards to an assessment. Some people feel very strongly in the community that there shouldn't be any assistance provided to a business who purchases an asset on their own volition, and there are others in the community who say PDCC has done a good job and is worthy of support from the homeowners. Be that as it may, the community needs to hear those arguments and evaluate the information to make a decision. As a Course owner, they need to plan for future golfing seasons with or without an assessment. However, he read the staff report, and he has a number of concerns and suggestions to offer, most of which relate to the question of timing. His first concern is that there is now new information, as contained in the Wildan report, that came out on Monday, which was the first time he saw it. He was sure many hadn't had the opportunity to study or inquire about it, and there will be staff reports and engineering reports to come. Therefore, a lot of fresh information needs to be shared and made accessible and circulated within the time frame noted in the staff report. He said PDCC recently had an Open House, and community members made requests for information about their revenue and expenses. Therefore, PDCC is creating a single web page that will consolidates all the information so that people can make an educated and informed decision. The web page will contain their financial information, because they think it's fair that it is disclosed. The web page will be easily accessed through a link to the existing golf course website. He said community members also asked for their corporate and ownership structure, maintenance, electricity, and water costs, therefore, that information will also be posted. He also received inquires as to how the assessment numbers were arrived at, how one can prevent the assessment from getting bigger over time, and how the assessment will work. Therefore, he will post Wildan's report, City staff reports, and other technical information that exist and is to come. Other questions included where PDCC would be putting new waste bunkers, desert landscaping, and impact to their views. Again, all this information will be included in the web page so that people can see the impact it will have on their own individual neighborhoods. Additionally, there will be a Q8�A page that deals with questions like, "Why 10 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 can't you just increase revenue?" or "How has the course heiped increase property values?" He said PDCC recentiy sent out a written notice to property owners providing them with a PDCC email address so that community members can propose any question, and he will personally call them back. To date, given the emails received, they have been able to respond within two days. He said, hopefully through that process, they can deal with the issues of information to ensure it is properly and fuHy shared. However, his concern remains that the engineering report will not be completed until May 9, and he didn't know if it will have errors/omissions and/or raise unforeseen issues. He said it would be unwise to set the date for a vote today and have the ballots go out on May 27'h when the report itself won't be ready until May 9. He said prudence and caution indicates all reports and information should be in hand before setting a date. Although he preferred an early vote, he understood a delay to November could happen, but emphasized the information needs to be final and accurate before proceeding in Juiy rather than in November. He is also concerned about the 55% threshold for a vote. Needless to say, if 46% were in favor of an assessment, PDCC wouldn't have thought to approach the Ciry to have that opinion prevail. Yet on the other side of the coin, if 36% voted against, the way the recommendation is structured, that opinion would prevail. He said they preferred, in fairness, to follow the simple majority of 50°/a plus one, but they understood the decision rested on the City Council, and in spite of their comments on the staff report, they understood the reasoning behind staff's recommendation. He said PDCC will live with whatever determination is made in that regard. Lastly, they used the County Assessor information to mail information to property owners, and about 2% of community members indicated they never received anything from PDCC. He hoped there was some mechanism where they can ensure all property owners are contacted and receive their ballots, and hoped City Staff can assist with this issue. Therefore, today from PDCC perspective, it was asking the Council to approve staff's recommendation to hold the vote, reflects and await on the engineer's report before finalizing the date, and reflect on whether the appropriate threshold is 50% or 55%. In the end, the central issue for PDDC is relatively straightforward. The Course was built in the 1960's when land was plentiful and water was cheap. The Course is 170 acres and PDCC maintains it all, and they do it with pride. He noted that most courses in the area average 110 acres. The revenue from the Course is sufficient to maintain 110 acres and provide a reasonable return on investment, and they can maintain 110 acres in a way that preserves the aesthetics for the golfers and provides a great golfing experience. In fact, they were just nominated as one of the best public courses in the Coachella Valley, and they intend to keep it that way, but the remaining 60 acres are maintained to preserve the aesthetic for homeowners and not the golfer. Therefore, by way of survey, they have gone to the homeowners and asked if they liked the way the golf course was maintained today, and 90% of the people who responded said yes. They asked then if they would be agreeable to covering some of the 11 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 maintenance cost, and 70% said yes. They also asked how much they were willing to pay, and 62% responded between $20 and $25; he noted Wildan's report was just outside of that range. He said the survey disclosed that most indicated an assessment would help protect property values and avoid the problems of the past, and PDCC would like confirmation of that by way of vote. If the vote passes, they will maintain the lands for the benefit of both the homeowner and the golfer. If the vote fails, they will maintain it for the benefit of the golfer, and PDCC would just like to know one way or the other so it can plan accordingly. He reiterated PDCC would like to proceed with a vote and get direction from the community one way or the other. Councilman Spiegel asked if PDCC planned to only maintain 110 acres if the vote failed. MR. SIHOTA answered yes, but he wasn't going to be that precise. He said the way the golfing industry is structured here in the Valley, most courses are 110 acres and they do reasonably weii, and he knew they could do the same. He said the Club went out of the way this year to demonstrate to the community what can be done, and for the community to decide whether or not they want to go to that extra level. If they do, it will be by way of an assessment. He said they are proud of what they have been able to accomplish. In fact, just yesterday, people stopped and thanked them for what has been accomplished, because they know what the course looked iike before and what it is now. Councilman Spiegel asked if it was feasible to take the additional acreage and make it drought tolerant if the vote failed. MR. SIHOTA explained no matter what the vote is, there will have to be a level of desert landscaping and waste bunkers, and those plans will be shared on the website. He said they wiN aiso have to deal with the di�cult question of the Executive Golf Course that takes up a lot of land and time, which the City asked that it be maintained. Therefore, there will be challenges to face if the vote doesn't go through, but the community likes the way the Course is, and he hopes to get their consent to maintain it with their participation. If it happens, great, but if it didn't, they will have to live with it. Mayor Hamik inquired about the monthly assessment amount. MR. SIHOTA responded the report from Wildan quotes $26.15 of which 10% of that, $2.62, would be Administrative cost of having the City involved. In response to the question as to why the City was involved, he said it was PDCC suggestion to involve the City, because it would be wrong if the money went directly to PDCC to be applied in whatever fashion it wanted, and by having the City receive the funds, it would ensure the assessment went for 12 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 the maintenance, which would be to PDCC benefit in any event. He said it would be better than simply turning cash over to PDCC. Mayor Harnik asked if there was any type of escalator. MR. SIHOTA answered yes, stating it was at the rate of inflation. However, he wasn't persuaded that over a measure of time that would be required. Going back to Councilman Spiegel's question, he said one could argue that if they did a higher level of desert scape and waste bunkering, the actual assessment could drop, but it will depend on what will be put into those areas, which is clearly an exercise that PDCC still had to go through with the community. He said by disclosing their plans at the front end on their web page, they should be able to protect against any increases in the assessment. Mayor Harnik said she was aware of how wide and expansive those greens were and asked if the plan was to bring in the amount of grass and put zero scaping on the sides or just maintain it with sod. MR. SIHOTA explained the whole Course couldn't be maintained with that much sod, stating that even if one did, given what's happening with water and electricity rates, it was inevitable one wouldn't be able to maintain it tomorrow. To be frank, they knew going into this, they would either have to shrink the course by putting in a lot of waste bunkers and desert scape, shrink the land base further, or go through an assessment where the costs are shared. Therefore, if the assessment were to pass, he envisioned a level of desert scape, waste bunkers, and some green space, stating it was in evitable they would have to go with that design. Councilman Tanner said people in the audience had written letters with concern over having an assessment placed on their real estate tax and questioned whether that was the only way to effectively make this work. MR. SIHOTA replied community members would be assessed twice a year when their property taxes are paid, which was his understanding. He went on to say that one of the reasons they decided to disclose their financial information, is that people need to understand the assessment didn't represent a windfaN for PDCC. He said the assessment represented a level of thought on PDCC to try to arrive at a reasonable number that recognized the need on the part of the public to try to maintain some semblance of aesthetics around their homes, as well as recognizing the challenges faced as an operator. He said they felt bad that this had resulted in a level of acrimony in the community, and they will do their best to reduce that temperature by sharing the information that has been requested. He said PDCC will be attentive to what people have to say and look at the results. 13 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 Mayor Harnik noted there were quite a few speaker cards on this matter and asked that comments be limited to three minutes, stating that if a commenUpoint was already made, it didn't need to be repeated so as to provide everyone an opportunity to speak. She noted she had read all the emails and letters submitted, understanding this was an emotionally charged issue. Therefore, she asked that everyone show courtesy to the speakers and allow them to voice their comments. MS. BARBARAPOWERS, KentuckyAvenue, Palm Desert, stated shewants everyone to read the staff report, because the Applicant did a great job with the golf course, but she was concerned about the 15-feet easement that PDCC would like to take. She shared she did neighborhood watch for most of the area, especially the area that's not in the association, and in the past, they have dealt with all kinds of trouble with kids partying, and if the easement becomes public use, homeowners wili have to deal with kids, bicycle riders, and dog walkers. She said it was a great neighborhood watch that focused on the front of the house, but if they had to watch the back area, who was going to enforce it, because the wonderful police department helped to get rid of those problems. Therefore, she didn't know how owning 15-feet on both sides of every fainnray was going to help. She said the blue area outlined in the map that was included with the staff report represented the 15- feet easement she was talking about, which is to be filled with either desert landscape or grass. Additionally, there are entryways onto the golf course without going through gates, which is where al� the kids come through, and once they find out the area is public again, there will be problems. She said at one time there were as many as 200 kids running through her yard, but not since Mr. Sihota has been in charge. MR. BILL COTE, Florida Avenue, Palm Desert, stated that at the last meeting the Applicants held at the Country Club, those in attendance were told that if the assessment wasn't approved, prope�ty values would be negatively affected because of the ups and downs in the go(f course, which sounded to him like a threat. He said to force the community to do something with a threat was extortion, and he didn't like the City even considering a LLD and putting it to a vote, which was basically rewarding a crime, stating the owners shouldn't be rewarded but arrested. He indicated on the speaker card that his position on this issue was neutral, but thaYs because he wants to ensure there are limits on the assessment if the vote goes through. He said if the Course becomes so profitable that the community's help is no longer needed, there should be a limit. He said the Applicants are begging the community for money, which was almost like public housing where if the person starts making too much, they are kicked out and no longer provided subsidy. He said it was the same here with PDCC wanting subsidies from the public, so there needs to be a limit on the assessment. 14 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 MR. DAVID GALIE, Texas Avenue, Palm Desert, stated he lives and owns his home of three years and is familiar with the history of Palm Desert Country Club. He questioned if the 55% approval vote meant 840 households or 55% of the number who vote. In other wards, if 400 people out of 800 vote, 220 votes would carry the day. Councilman Tanner answered yes, stating that was the way it was explained to him. MR. GALIE said that didn't sound very favorable to his fellow neighbors who probably wouldn't go alang with that process, and it was not a representation of democracy. He said the owner promised all these wonderful things, but he hasn't received a response to his written letter. In fact, he hadn't heard about this 15-feet easement until this morning, and he tries to stay involved. He said the idea that 40%, 70%, or 80% of the people voted in favor by some survey offered by the PDCC management is not a valid number and cannot be accepted. He said the Council will find that opposition is far greater, and the community will hold the City responsible if it persisted with a vote. He said people will assume the Council did it for a reason for going against community wishes, and when ballot time comes, they will vote accordingly. Additionally, the website that this owner is offering is too little too late. He believes the community should have their own meetings, then the community can retum to the Council with their decision on whether to double their payments by implementing a self-imposed tax from $25 to $50 per month, or not, but it should be the community communicating with the Ciry and not the owners of the golf course who have their own agenda. MR. RICHARD DODSON, Illinois Avenue, Palm Desert, stated he enjoys a 60-foot frontage along the fainnray of the 17"' hole. He attended the evening meeting held at PDCC Clubhouse on March 24. At that meeting, they were informed the golf course was 170 acres, and when compared to the other golf courses averaging 110 acres in area, it was at a competitive disadvantage in terms of the required green space maintenance. At that time, he understood the problem involved the additional maintenance of discreet pockets of green space, which were out of play, and as the presenter said, "never saw a ball.° He said it would have been helpful if the presenter had provided a planned graphic indicating exactly the areas considered out of play and unnecessary use to the golf course. Had they done so, rather than waving their arms and speaking in generalities, it would have been clear that sandwiched in between the 18 links of the main golf course was a second nine-hole executive golf course, which should have been subtracted from the 170 acres. He found it hard to believe the presenters didn't consider that option and probably ruled it out, preferring to work with the 170 acre number rather than a lesser number. He left that meeting with the impression that it was more smoke and mirrors than one of clarity. Yesterday, he read a neighbor's copy of the City's staff report and 15 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 learned for the first time that a 15-foot easement running along both sides of the fairways was being considered for the basis of the LLD taxation of 180 homeowners fronting the golf course. He questioned how this matter went from street pockets of unnecessary green space to the proposed creation of this taxation easement for partial green space maintenance, and why and how did they arrive at 15 feet. The report also suggests that homeowners paying for the partial grounds maintenance would be able to make use of the easement, but it was not specific as to what that use would be. For example, would the 850 paying homeowners allowed to walk their dogs on the grounds they are maintaining in this easement, which is an activity currently not allowed on the private property of the golf course. He understood the golf course owners were pushing for a vote in May, at a time when many homeowners are out of town, but glad to hear they agree with his view to postpone the vote to November. He said if the vote was proposed now, community members would not have sufficient information or clarity to vote wisely. MR. LOUIS GRINBAUM, Illinois, Palm Desert, pointed out that even though these are golf course homes being discussed, many residents are low-income and on limited funds and cannot afford an extra $25 a month to help out a private business. He came across one lady who couldn't afford air conditioning, and everyone knew how vital that is in the desert; she had to have public subsidy assistance. Therefore, when considering this issue, don't just think about the snow birds who can afford $25 to $30 a month, but those whom this fee will make a big impact. He made the comment that he would be happy to take an extra 15 feet of property and willing to pay property tax on it as well, stating a lot of people would enjoy the same opportunity, which was another option to consider. He said the HOA monitored the golf course, and if it's not up to standards, homeowners do get written up. MR. BRENDAN GORDON, Minnesota Avenue, stated he has lived at his residence since 1977, and he and his neighbor did not receive a survey. He's concerned that the information given out is not including some. Additionally, he is Canadian, and he usuaNy is home by now, but he stayed an extra week to attend this meeting. He said it took two weeks for mail from Palm Desert to arrive in Canada, and another two weeks to return, therefore, he urged the Council to allow for at least six weeks of time to submit a vote. In doing a quick calculation of the assessment at $26.15 per house multiplied by 12 months, it amounts to $265,000 a year of additional revenue to the owners, which raises the value of the golf course up between $3 and $4 million. He asked if there was a way of stopping the taxation if the golf course was sold, because if he personally owned a golf course that could make $3 or $4 million tomorrow, he would sell it. As far as he understood it, there was no way of stopping this taxation. 16 MINUTES REGULAR PALM DESERT CtTY COUNCIL MEETING APRIL 11, 2013 MR. CHARLIE ASH, New York Avenue, Palm Desert, stated he was concerned with some of the factors on this matter. He said the easement was a new development to him as he just learned about it yesterday. He posed a question to the City Attomey as to how that would affect the green belt that was established at PDCC over the years, stating that in this last election, property was approved and sold to housing, setting it aside in perpetuity as a green belt. He wondered if this easement affected the green belt or not. He was also concerned this issue was on a fast track, which can cause things to happen or not happen that should. He suggested taking our time in doing this right. Additionally, he pointed out that all of the houses in that area are 6,000 square feet with the exception of the new 1995 homes, which are 5,100 square feet. He said if an assessment is considered, everyone should have the same assessment, because if it's based on the frontage, he had 30 feet, and it would be unfair to someone else that didn't have the same amount of property. He said the survey by PDCC concerned him as well, because many didn't get it. He keeps hearing these percentages based on the survey that indicated 75% voted a certain way, yet who verified its accuracy. He said the City is taking action based on these percentages and wondered if City staff checked them for accuracy. Otherwise, anyone can come to the City with their own survey and the City is willing to believe it. He said more homework was needed before ending this issue, and he agreed that there are a lot of people who can't afford that additional payment. MR. FREDERIK LEEGER, Texas Avenue, stated he was a permanent resident for more than 25 years at Palm Desert Country Club, and he's seen the ups and downs of the golf course. He came to this open forum to express his strong opposition to this taxation, because he and his neighbors are living on parcels adjacent to the golf course. His backyard has a view of the 8�' hole, which is nice and green like many other golf courses in the Coachelfa Valley, making the comment that it was a reality show of golf and money. He said PD Golf Operations, LLC, is a Canadian outfit that is self-serving and a moneymaking operation with a staff of lobbyist and financial advisors that are promoting a scheme of assessment to pay for operating expenses. He said it was all about money, and with all due respect, he had a lot of Canadian friends and people that enjoyed that. Indirectly, they get suppo�t from the HOA, because there are a few people that like to play golf and they like to play it on the cheap. He said feedback from a phoney survey claimed there was great support for an assessment in the majority of local golfers. Who else, but the golfers that voted in this phoney survey, and he was one of the exceptions to oppose it, but many of his neighbors never opened their mail. He said many of the homeowners are residents and non-golfers. He questioned, who did PDCC, LLC, think they were, because there are plenty of golf courses in the Coachella Valley. Thanks to plenty of water and sunshine there is plenty of play as long as you pay the price. The business community in the Valley welcomes the snow birds from all over the Country, 17 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 and it supports local economy. As a non-golfer, he will not pay any assessment or tax to support the money hungry management company out of Canada. MS. CONNIE SWANSON, Florida, Palm Desert, thanked the City Council for having this meeting. She expressed concern about a special district for iandscape and lighting, stating that if this was allowed for a private golf course, even a private owner for a public golf course, what is to keep the City from another district like a shopping mall that needs painting and landscaping, wiil the homeowners be assessed again. She couldn't see how citizens could be assessed for a private corporation, stating it was a conundrum. She said if the golf club can no longer maintain the 60 acres, she suggested the club give those acres to the City as the residents are already taxpayers paying higher fees because they live on the golf course. She said if the City owned the property, it will have an interest in this public course and to clean is parks and recreation faciiities. The City will then have a right to assess. She said if the golf club didn't want to deed the 60 acres to the City, they might consider deeding it to the property owners. However, deeding it to property owners couid be a myth with all the assessments and bickering. She said the acres belonged to the City, and the Council as elected officials are trusted by the community, and they had the power and capability to solve this problem. MR. JIM LAWSER, New York Avenue, Palm Desert, provided a photograph of the area behind his fence, the grass that is nonexistent, demonstrating what a poor job they've done of maintaining eight feet of dead grass. Additionally, when the grass is mowed, it throws dead head sticker onto his yard. Therefore, since they did a bad job of maintaining the area thus far, it would do no good to have PDCC take it over and be reimbursed for it, stating the City would get more complaints than its worth. He also disagreed with Mr. Sihota's assessment of the survey that most people are in favor of an assessment, because he had a copy of it and most who were in the majority was conditional, but the conditions are not mentioned so he didn't think it was valid. There were suggestions like free golf to be included in the package, and Mr. Sihota didn't include it in the assessment. Therefore, the survey included a lot of people that are not actually for it. He said the City shouldn't be involved in something this controversial. MS. TERESA LAWSER, New York Avenue, Palm Desert, thanked the Council, City Attorney, City Manager, and especially Ryan Stendell who has been amazingly professional in this process. She understood everyone had very hard jobs as she and her husband worked for state government in Colorado for nearly 30 years. She has crossed out a lot of items off her list, stating there was a better understanding on the time line with the concern over a vote in the summer. The LLD was touched upon by Mr. Stendell on whether Proposition 218 was the right vehicle, but it was something that will 18 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 be figured out. She was not in favor of the assessment, but read a LLD is established for offsetting cost to beautify neighborhoods, and could also be expanded and allowed for a broader assessment if there was a broader benefit found. In other words, at a minimum, all the houses in Palm Desert County Club should be assessed and not just the ones bordering the golf course, because the house across the street will have the value of their home go up. She said there is a broader community benefit, therefore, the wealth or the debt should be shared. She pointed out that an annual $300 assessment would pay for two months of her husband's Parkinson's medicine, stating that was a lot of money for her household. She said if there was a ballot sent out, it ought to be by the City for accountability. She said she's filed open record requests with Mr. Stendell, and he was great in responding. However, if the ballot is mailed out by the Country Club, it would need to be maited certified registered mail. MR. JIM REITHOPPER, Illinois Avenue, Palm Desert, stated this golf course has been in existence for more than 50 years, and whiie it's been up and down, iYs all been caused by the overwhelming financial burden against the property, particularly the prior owners with the multimillion dollar renovation. He said the current owners were lucky enough to purchase this prime Coachella Valley golf course for $1,140,000, and unlike most of his neighbors, County records show they have no mortgage with the exception of a recently filed mechanic lean for $44,000 for work in repairing the state-of-the-art watering system. He didn't know how this investment company could buy for 6'/z cents on the dollar, hold the property mortgage free, and not make a huge profit, And to try to get an assessment to offset their cost of water, for the most part, from poor, working class, and fixed-income seniors living in their 50-year-old, 1100 square-foot, and $150,000 homes, was unconscionable. He asked that this whole procedure be slowed down, stating it was going at a heliacal pace that it was head- turning. He never received any survey and he has talked to others who didn't receive it as well. Therefore, whatever information the Council was given to lead it to believe there was some consensus is totally bogus. Additionally, this special assessment issue should not go on the ballot. He said PDCC promised a social membership, which should be in writing if community members end up being stuck with an assessment. MS. DANIELLE WRIGHT, Florida Avenue, Palm Desert, stated she purchased her home last summer, and priorto purchasing it, she investigated what her property taxes and homeowners association fees would be, and what her expenses would run for electricity, etc., doing her due diligence to make sure she could cover the costs. She said this company had to know what their operating expenses were going to be with regard to water for their maintenance, electricity, and all the things that are incurred in operating a business. If they could not foresee operating under standard golf course fees, then they shouldn't have invested in that property, and shouldn't have 19 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 planned to operate the business banking on putting forward an assessment on surrounding citizens to support their business. It isn't right, and she didn't think the assessment should go through or even go to a vote, because it's not the community members' problem. MR. TERRY ARCHER, Michigan Drive, Palm Desert, stated he purchased his home in 1990. Since then, he's watched the condition of this golf course go up and down like a yo-yo, and he's never seen the golf course in better condition. He didn't like the idea of an assessment, but he didn't want to see a vacant and dead golf course, with foreclosed homes, increased crime rate, and reduced property values by 60 to 70 percent. He'd much preferred an assessment to those types of conditions experienced three years ago. It's obvious, by the comments made, the information needs to be better presented to the members of the community for accuracy and to give everyone an equal opportunity to assess and make a choice. He didn't know if the voting percentage was based on an Ordinance, but to increase it from the normal rules of 50% plus one, to this 55% was unfair to the golf course. He believed the set percentage was a standard rute and regulation, and iYs unfair to change it. He was in favor of the assessment, but an extended amount of time was in order to get better information out to the community and for the City's involvement. What he didn't want to see, which is happening now to Palm Springs Country Club and soon Santa Rosa, is that condominiums are going in, and he didn't want houses or condominiums in his back yard, he wants a golf course. MR. BOB LUDWIG, Indiana Avenue, Palm Desert, stated he's lived in his home since 9 961. He has several issues with this matter, stating that in the golf course glory days, it used to hold the Bob Hope Classic, now known as Humana. He agreed water was more expensive, but it was great water in 1961; water now has a lot of minerais. The Club is now asking for $26+, and when he first heard about this, it was $23. He said the amount has already gone up 10°/a and the community hasn't even voted. He suggested turning the golf course into a desert. At the open house they were told that if the golf course was 90 to 110 acres, the owners wouldn't even be talking to the community and there would be no discussion of an assessment. He believed the owner is a business man out to make money; however, many like him are on a fixed income. He pointed out the Club is making a quarter of a million dollars for the 50 or 60 acres. He reiterated this was not drinkable water; its potable water. He agrees the golf course was green, but at what cost. His property is on Indiana Avenue, and his fence is 80 to 100 feet and it borders the golf course. In the early days, the people that ran the prope�ty would use spreaders around everyone's property, so that the seed didn't fall onto one's property. He has stone around his property, and iYs difficult to move 300 square feet of stone to pull the weeds, stating he should bill the club owners for his cost of round up and his time to keep his yard looking the way the HOA wants it. He is concerned that a private business who has oniy been 20 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 operating for a year is now begging for money, and it almost sounded like the owners were already in bed with the City, however, he hadn't heard what the Council had to say. He questioned how a private corporation can come in after one year's time and want to assess the community for water and electricity. He commented the company wants to double his assessment by offering a social membership of 10%. However, $3,000 had to be spent to get that 10% to equal the assessment, which would give them an additional $2,700, which didn't make sense. MR. DAVE MOURHESS, Colorado Street, Palm Desert, stated he and his wife Karen live in the PDCC community. He developed the top ten reasons to reject the LLD for the community, which include: property owners have not been invited to be investors; public funds to subsidize operations of a private enterprise is unwarranted; assessments would create an ideological divide about the practice of subsidizing for a profit entity; the LLC hopefully conducted sufficient due diligence prior to the acquisition of the golf course, and the Pro Forma of financial forecast to project revenue and expenses for near and long-term horizons should have been analyzed; if LLG requires a capital infusion to fund their operation, they should consider equity/debt financing like every other business; currently PDCC residents pay an annual assessment, with many of them paying an additional monthly assessment to the Esperanza HOA; a business back stop program working with local lenders would be more acceptable to fund the LLC requirement for ongoing operational commitments; an assessment lasts forever. He strongly urged the Council to reject the golf courses request to establish a LLD. MS. REGINA GONZALES, Indiana Avenue, Palm Desert, thanked the Council for the opportunity to speak, stating her comments would be brief, because many items have already been discussed. She pointed out that Palm Dese�t Country Club was not a gatetf community, it is not a private entity, and community members are not paying for security there. However, residents do pay property taxes, and the bill indicates what it covers, which is to take care of the area. Therefore, she did not see why an additional assessment was needed for a private company. She said it was a public golf course run by a private company, and she didn't know how that worked and would like someone to explain that aspect. She said this was a private company that came and made the community better, but the community should not have to pay into the company to make it nice, because it was a benefit that came with it. As previously mentioned by others, if the company needs additional income, being a private company, they should consider getting stockholders, but not ask the community to contribute. She said many are living on a day to day basis and don't have the money to be paying extra expenses. 21 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 MR. CHARLES HANNA, Warner Trail, Palm Desert, brought a flyer that indicated the golf course was for sale, which was displayed for the audience. He said if that was the case, what would the long-term deal be with this tax bill. One of his concerns was the cost per square footage, and if it would be based on the frontage of the house or the golf course proportion, because each place is different regarding how many feet the frontage is to the golf course. He said if the assessment was $26 for 40 feet, and he has 60 or 80 feet, then he would be paying $50 or $60 a month. The other issue is that if the golf course is sold, who will be responsible for keeping up the golf course, and would there still be a tax bill that residents couldn't get rid of. However, if the community pays the assessment, he would like for the course to remain nice, but if not kept up and it went back to the way it was two years ago, can they remove the assessment or was it indefinitely. Additionally, if the golf course is sold, will the new owners have to accept what the City has established with the assessment, or can they suggest something else again. Mayor Harnik inquired about the date of the flyer, and a member of the audience clarified it was the original bank sale ad. MS. KATHRYN CULVER, Oregon Circle, Palm Desert, stated otherspeakers already covered PDCC was a private entity for profit. She asked for the website address that Mr. Sihota said was available for information, which he wouldn't answer about at the open house. MR. SIHOTA responded the web page hasn't been created, but there will be a link through the main website, which is palmdesertaolf.com. MS. CULVER pointed out there was a mailing list floating around. She inquired about the staff report that many referenced with the information about the easement, and a community member offered to give her a copy. She noted there was a letter sent out by Palm Desert Country Club on April 2, and in the last paragraph of the first page, it states, "People have asked that if fhe assessment isn't approved, if would mean some lands adjacenf to homeownerproperties wou/d notbe maintained."She was confident the City of Palm Desert would not allow that to happen, questioning the Council if it will make sure PDCC maintains the property, although, at this point, they have already admitted that regardless of whether the assessment went through or not, they will change a lot of the property to desert landscape. Councilman Spiegel responded Palm Desert County Club could do that. MS. CULVER agreed, but PDCC made a threat to say, or offered not to do what was said in the letter if they got the assessment. Councilman Spiegel stated the City's Code Compliance Department enforced the last owner to keep the course up, which was very difficult and 22 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 it cost the City a lot of money. However, he did keep it up and he finally sold the course. He said the City will make sure the course remains up, but it will cost the City a lot of money. Mayor Harnik stated the Council had to look at the whole picture, and as closely as the Council worked with Code Compliance, everyone needed to think about the state of that golf course not too long ago. MS. CULVER said she understood, because she's lived at PDCC since 1973, and she has seen the ups and downs. She asked how much will it cost the City to send out the ballots for a vote, and is the City prepared to fallow through that process. Councilman Spiegel said the City was not at that point yet. MS. CULVER asked what was the Council then deciding. Mayor Harnik encouraged Mr. Culver to read the staff report, which will be very helpful for her. MS. MARY BAGHBODORIAN, Louisiana Street, Palm Desert, stated it concerned her that the City had been working on the matter for a while, noting a financial consultant was hired to come up with a report, yet no one contacted the homeowners who will be affected by this. Therefore, the City had atready spent money to hetp the other party. She said they had to dig through information and asked Mr. Stendell to have PDCC to announce the meeting. She said if it wasn't for the homeowners association sending a letter to inform the homeowners, the residents wouldn't have known. Therefore, she felt the City wasn't doing anything to protect the homeowners, and they are the voters, which the Council had to remember. Mayor Harnik agreed, stating that is why there is a meeting, and the Council wants to hear from everybody. She explained that if the City didn't gather some amount of information, there would be nothing to talk about, which is why everyone here will provide even more information. MS. BAGHBODORIAN said she understood, but the information obtained regarding the homeowners is from the other party who has a vested interest to give the Council any information it wants to hear. She said the surveys didn't have names or addresses, so anyone from PDCC could have filled out as many surveys and come up with any number. She said the City should have had a lot more responsibility when it came to the survey, and the homeowners want more consideration from the City. She said if a company has paid cents on a dollar to obtain the property, they are not financially vested. The community would like to see them more vested financially, before they ask residents to pay. She said the previous owners made $7 or 23 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 $8 billion selling land, and now homeowners are to subsidize the current ones; she wonders what will be next. She said the City should stay out of this matter, because business is supposed to take care of itself. MS. MARILYN MORENO, California Drive, Palm Desert, explained thatwhen she bought her home 25 years ago, she had a beautiful view of the 17`h fairway, then the course was sold and then owners put in a beautiful lake. She and her husband were jumping up and down with joy with the thought of having a lakefront property. A previous speaker said, °share the wealth," well, she would have loved to share the wealth, but unfortunately, she has the pump house in her back yard and no view. She couldn't sell her house even if she wanted to, because someone can go down three houses and get a house with a view of the lake. Her concern about the assessment is that she will be assessed the same as everyone else, when her property is in the 60% of what is refeRed to as "seldom comes into play." She said her property has a pump house and it seldom comes into play. She asked what will happen if the owners don't want to maintain a property that seldom comes into play. Additionally, the HOA sends her letters to clean up her property, which she does, but will she have the same recourse to ensure that her property, which seldom comes into play, is maintained. She asked the Council to take that into consideration and possibly consider a waiver for people with the same problem. MR. FRANK TAYLOR, stated that most of his comments have already been answered, but wished to emphasize the need to build trust and a partnership with the community as a whole, which hadn't been done at this point. He said there has only been one community meeting accomplished. Also, as a resident of PDCC for 28 years and living on the fairway, he didn't get the survey until he spoke to Mr. Sihota at the City's study session. He spoke with Mr Sihota about fixing that aspect and, as of two days ago, it still hadn't been fixed, because he didn't receive the latest letter where the owners made the comment that properties wouldn't be maintained if the homeowner didn't pay. From working with the Council and serving as their Assistant Chief of Police before retiring, he knew the City had been at the forefront in ensuring the PDCC property was kept up to Code, even through the foreclosure process, and thanked Council and staff for that support. He asked that the vote be delayed until November, stating more time was needed for conducting community meetings and sharing of information, including the web page, instead of rushing this through. He was up for discussions regarding any type of assessment, because he wants to do what's best for the community. He recalled going through many meetings when discussing undergrounding electricity in the area, which was a lengthy process with many community meetings. He believed the same process needed to be followed here to avoid any unknowns and having hundreds of people at Council meetings being upset. He said everyone should be able to 24 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 come to a meeting in partnership and trusting each other, with eventually following through on what the community wants. MR. JOHN STANFORD, Louisiana Street, stated a lot of negatives have been said, which he felt were appropriate, stating the presentation offered was poorly organized and presented. The one issue he felt has been glossed over is the idea of a LLD, which is interesting, but the Club is about 20 years behind the times. The owners have irrigated the course like never before, stating there is grass in his area wall to wall. Everyone agrees the course looks great, but water is an issue in the desert. In the last 10 or 15 years, the emphasis by the cities and the water district has been to limit the water and limit the amount of turf being irrigated. He heard the comment that the plan is to get this capital and shift over to desert landscaping so what was the point. He said this was a business deal and businesses need to adjust to the realities, stating most don't have the option of having a governmental entity raise fund to do things for its business. It seemed to him the business was asking for the money, and the flip side is that the company will do what it should have done initialiy. MS. DIANA IPPOLITO, Cafifornia Drive, Palm Desert, stated she owns two home on California Drive and has lived there since 1996. When she purchased her homes, she knew it was a mix bag considering the ups and downs of the economy, which is the same with the golf course. She believed the current owners bought the golf course without doing their homework and are now having buyers' remorse. Therefore, based on what she has seen in the survey and all, the owners underestimated the homeowners, and what they are capable of and not; she believed the company is looking to the community to solve their problem. Additionally, the property next door to her home has had many violations, and the City and HOA has been out there. It turns out the property is owned by the owners of the golf course, and they also purchased quite a few homes there. Therefore, if the City is building trust, she is looking at flipped up shingles on the roof of the house next to hers, and a yard that has weeds knee high. She reiterated the people that own that home are the owners of the golf course. Responding to question from the audience, Mayor Hamik said any property owner, based on the staff report, would be a voter. Councilman Spiegel stated the City has been through this before and it appeared it was going through it again. He said the City loves Palm Desert Country Club and loved it when it annexed it, which was a few years ago. He noted the City has done a lot of good there, and Terry Archer and Charlie Ash could vouch as they served on the Project Area 4 Committee. When the City had Redevelopment funds coming in, Project Area 4 Committee would decide how the money would be spent in that area, and it worked out pretty well. Unfortunately, there have been ownerships that have gone up and 25 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 down. He agreed it was too soon to do anything this evening, which is why he will propose continuing this item until at least September and decide whether or not to send out a vote. In the meantime, he suggested that Mr. Sihota follow through with his suggestions for informing the community on what is going on and why he needs the money. The City wants the golf course to be maintained, because iYs in Palm Desert, and is considered just like any other golf course in a gated community. He didn't believe it would be appropriate to bring anything to a vote at this time, and a continuation of the item would give the owners a chance to spend more time with the people who live there and share their information. Councilman Tanner concurred with Councilman Spiegel's comments. He encouraged Mr. Sihota to be very transparent, stating he came before the City Council and people who have purchased their homes, some who have lived there since 1973. He encouraged him to show his financials and ask/answer their questions. He certainly agreed this issue needed to go back to the residents of Palm Desert Country Club to make a decision on whether or not they wished to go through with an assessment. However, today was not the time, and it will happen when everyone is back in town for all their questions to be answered. Councilmember Weber agreed with Councilman Spiegel that this item should be delayed, because it concerned her that many indicated they didn't receive a notice or mailing, even after advising Mr. Sihota about it. However, she also heard Mr. Sihota say he was going to check on the property ownership tax rolls to make sure addresses are correct. She was baffled that those who have lived in these properties for a long time didn't receive notification. Therefore, she was in favor of continuing this item. Mayor Pro Tem Benson stated more time was needed to get the web page up, primarily for the financials, as she and Councilman Spiegel have been through this so many times, that it felt like they owned a golf course. She believed in more transparency on why the assessment was needed, and there is probably good reason for it, but the people need to know the facts if they are assessed, and if iYs the right amount. She was in favor of putting this off until at least the beginning of November or September so that the vote can be during that season. Mayor Harnik thanked everyone for their patience, because she understood this was frustrating and difficult. She said great questions, great points, and valid concerns were made. One thing heard loud and clear was that better communication was needed, as it had fallen short. However, this wasn't the first time homeowners have said they didn't get what they believed was sent out according to property tax rolls, and it won't be the last, but she agreed better communication was needed. She heard a couple of times that PDCC was a public golf course, but it's not, the course is privately owned. She is 26 MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING APRIL 11, 2013 concemed about the golf course, because as mentioned by one gentleman, in Palm Springs they are getting rid of a golf course and putting in homes. She pointed out there is a shift in the trend with golfing, which had to be factored into the thinking, because people don't golf as much, and the popularity of golf is waning. Most importantly, there were questions and points made that have to be addressed with better communication, and the website was a great way to start. In the end, she agreed that everyone deserved to know what is going on, quite literally, in their own back yard. Councilman Spiegel moved to continue the matter to October. Motion was seconded by Tanner and carried by a 5-0 vote. With City Council concurrence, Mayor Harnik called for a recess at 6:06 p.m. She reconvened the meeting at 6:12 p.m. B. REQUEST FOR DIRECTION TO STAFF CONCERNING ANNEXATION OF AREAS NORTH OF INTERSTATE 10. Mayor Harnik recused herself from this item and turned the meeting over to Mayor Pro Tem Benson, and left the Council Chamber. Ms. Aylaian displayed an area map for reference, and she noted the staff report included background information, Palm Desert's analysis that was done a year ago on various areas north of I-10 for potential annexation, and a report done by Cathedral City recently when they were looking at annexation of certain areas north of I-10 as well. She said a couple of new pieces of information had come in since the staff report was put together, which she will cover as well as what the City's options might be. One new item is a letter from Cal Fire from the Fire Chief and Division Chief, urging Palm Desert to either oppose the area Cathedral City is proposing to annex or have Palm Desert consider annexing it. Secondly, there is an email/message received from Andy Hall, who is the City Manager for Cathedral City, point out relevant history about their proposal to annex all of Thousand Palms (TP). What he points out, rightly, is that Cathedral City was directed by Local Agency Formation Commission (LAFCO) to keep the entire TP area together. Therefore, this was not an intentional effort on Cathedral City's part to encroach into something that is just north of Palm Desert. Also, Cathedral City Council asked their staff to review the potentiai annexation with a sub-committee and then report back before making a decision to submit their application to LAFCO. The reason this was relevant, is that it meant the application wasn't being accelerated as it may have appeared. She said Palm Desert staff has looked at the issue of potential annexation and its sphere of influence (SOI) north of I-10 a number of times in recent years, and it was now looking for Council direction. Staff would like to know if there are particular areas they would like staff to pursue or investigate further, or if the Council wasn't interested in embracing the idea any time in 27 n+t�rrr�� t�� `�— ��— �� � /.� .. .., , .,.._ �%����um r� ����� CITY OF PALM DES �j p,�E� �� ��� ��,�,�,;� � ._r.. CITY MANAGER'S OFFI �. � > J� -C� - —� �..� . ,,�. �3 €- C':;;�: 5'80�'� STAFF REPORT REQUEST: CONStDERATION OF APPROVAL TO BEGIN THE PROCESS OF FORMING A LANDSCAPE AND LIGHTING DISTRICT FOR HOMES LOCATED ON THE FAIRWAYS OF PALM DESERT COUNTRY CLUB SUBMITTED BY: Ryan Stendell, Senior Management Analyst APPLICANT: PD Golf Operations, LLC, dba: Palm Desert Country Club Moe Sihota, Managing Director 77200 Califomia Drive Palm Desert, CA 92211 DATE: April 11, 2013 CONTENTS: Willdan Correspondence Palm Desert Country Club Map Recommendation By Minute Motion: 1. Direct staff to begin the process of forming a Landscape and Lighting District (LLD} for homes located on the fairvvays of Palm Desert Country Club (PDCC). 2. Direct staff to prepare the LLD documents with a 55% approval threshold from the community vote. 3. Direct staff to conduct background checks on PD Golf Operations, LLC dba: Palm Desert Country Club, including a!! principles of the Limited Liability Corporation. Executive Summary Approval of staff's recommendation would allow the concept of the LLD on the fairways of Palm Desert Country Club to go to a vote of the affected property owners at an approval threshold of 55%. Per the previously approved funding agreement, the City is being reimbursed for all costs associated with this proposal less staff time. Staff Report Palm Desert Country Ciub LLD April 11, 2013 Page 2 of 4 Backpround Below is an update of all events that have occurred to date related to this project and a timeline of critical dates if the Council wishes to proceed with a vote of the Community. At its meeting of February 28, 2013, the City Council authorized a funding agreement with PDCC for the purpose of forming an LLD or CFD to assess homes along the fairways that receive a benefit from the golf course. The agreement provided a phased approach teaming with Wifldan Financial Services to identify the appropriate financial tool and hosting a study session with the City Council with recommendations. The second phase, if approved by the Council, would include the actual legal steps required to form an LLD. City Council Study Session: March 14, 2013 At the Study Session of March 14, 2013, Moe Sihota, Managing Partner for PDCC Golf Course Operations, updated the Council on operations at the club. Mr. Sihota also discussed the trends of previous ownership and the character of PDCC Golf Course (large open turf fairways) which leads to an increased maintenance cost over traditional golf courses. Based on his own surveys with the community, Mr. Sihota expressed that he would propose a monthly assessment of $20-$25 per dwelling unit on the fairways (approximately 850 homes). This would yield an approximate annual assessment of $204,000 -$255,000, less the City's administrative costs in running the district. Mr. Sihota also indicated that he would be hosting a community meeting to discuss this proposal. Staff briefed the City Council on the legal differences befinreen a CFD and LLD and indicated that we believed that the LLD was the most appropriate option. Staff discussed the LLD would require an easement be dedicated for the private benefit of the homeowners along the golf course. The proposed easement would likely be approximately fifteen feet in width unless that width could not be achieved. Staff also indicated that voting would be weighted based upon the length of frontage along the golf course. Staff indicated that we would retum to a regular City Council meeting in April with a recommendation of how to proceed. PDCC Community Meeting: March 24, 2093 PDCC Staff hosted a community meeting at its clubhouse on Sunday, March 24, at 6 p.m. Staff observed approximately 150-200 community residents in attendance. Mr. Sihota presented much of the same information to the residents as he did to the City Council. Focusing on previous ownership issues and increased maintenance costs due to the large open fairways, Mr. Sihota presented his proposal as being mutually beneficial to the community. Staff observations were that the group in attendance was fairly split with a number of folks in complete opposition and a group who were willing to listen and ask questions. Staff Report Palm Desert Country Club LLD April 11, 2013 Page 3 of 4 Staff was approached by several community members asking various questions ranging from whether the $20-$25 per month was really necessary, timing of the vote, and statements that this is a private business and should not be receiving monies through taxation. Proposed LLD Structure and Timeline: As discussed previously, if the Council wishes to proceed, the LLD is the preferred method. The LLD would require fhe creation of an easement for private benefit over an approximate fifteen foot strip of land buffering all fairways. This easement would allow homeowners use of this strip of land and ensure its maintenance is provided for in the future. The calculations for determining the maintenance costs and final assessment amount would be formulated in the engineers report following this process. In most traditional LLD's, the City collects the funding and is responsible for carrying out the maintenance. In this case, it would be much less expensive to utilize the golf course staff for the maintenance of the proposed fifteen foot easement. If the district were approved, staff would propose an agreement which transfers funding related to the LLD to PDCC on a reimbursement basis. For example: the costs of utilities associated with the easement areas would be reimbursed to PDCC after proof of payment was received. Staff believes adequate oversight could be built into this process to ensure a transparent process. Proposition 218 governs the establishment of LLD's and sets forth minimum standards for their creation. Currently, a simple majority of responding ballots is needed for creation of an LLD. Since these are minimum standards, the Council has the ability to set higher standards prior to accepting a district. Due to the controversial nature of this process, staff is proposing a 55% approval rate, which we feel represents a much firmer target for community support than a simple majority. Staff arrived at 55% based on current legislation to reduce the 2/3 voting requirement of many forms of tax districts. Following is a timeline of the process of formation if approved by the City Council: April 11; May 9: May 23: May 27: July 11: August: Directive of City Council Preliminary Engineers Report complete Intent meeting (City Council) Ballots mailed Final public hearing declaring results Willdan produces information for tax assessor's office. Staff has heard concerns about balloting taking place in summer months. Ballots will be mailed out to the legal owner's permanent address however, if concerns continue to persist Council has the option to direct staff to delay balloting until November of 2013, which collection would occur beginning in FY14/15. Staff Report Palm Desert Country Club LLD April 11, 2013 Page 4 of 4 Fiscal Analvsis If approved and established, the LLD would reimburse the City for administrative costs related to its operation. The presence of the LLD would put the City in the position to take on a higher level of maintenance in the event an owner went out of business, such as has happened in the past. In theory, the City would have money on hand to maintain the fifteen foot strip of land along the fairways; however, it is uncertain if the City could maintain the easement areas as inexpensively as the golf course operations. This does put the City at potential risk of having to reduce maintenance (evels or utilize City resources on private lands if the course were abandoned. There are no costs incurred by the City related to the formation of the LLD except for staff time relating to the project. Additional monies from PDCC will be taken in on an as- needed basis to complete the project. Submitted By: Ryan Stendell Senior Management Analyst Reviewed and Concur: �aul S. Gibson, Director of Finance � M. Wohlmuth, City Manager Memorandum To: Ryan Stendell, City of Palm Desert From: Jim McGuire, Wilidan Financial Services Date: April 2, 2013 Re: Palm Desert Country Club Landscape Easement District Feasibility Summary of Findings Willdan Financial Services ("Willdan"), on behalf of the City of Palm Desert ("City"), has conducted an analysis of the Palm Desert Country Club area to evaluate the feasibility of establishing a district to provide a revenue source (funding) to support the maintenance and operation of a dedicated landscape easement (landscape buffer) befinreen the golf course which is privately owned and the adjacent properties. Willdan has worked with City staff and the developer gathering relevant information regarding the potential improvements and properties in the area to develop the parameters for establishing a special district to fund the ongoing maintenance of this landscape easement buffer. In order to fund these improvements through a special district ("DistricY'), whether that district is in the form of an Assessment District under the provisions of the Landscaping and Lighting Act of 1972 ("1972 Act AD") or a Special Tax established pursuant to the Mello-Roos Community Facilities Act of 1982 ("CFD"), the area containing the improvements will need to be dedicated to the City or an easement established. (Generally, such districts cannot fund the maintenance of improvements on private property, except in very specific circumstances, so at a minimum, the improvement area will require the establishment of a dedicated easement). While this memorandum provides a summary of the pros and cons of utilizing both an assessment district approach (1972 Act AD) and a special tax (CFD), the focus of this memorandum is primarily on the feasibility of establishing an assessment district, in part, because of the more stringent benefit nexus issues associated with the imposition of assessments. Although this memorandum provides a reasonable estimate of the annual expenses associated with the improvement area to be maintained and the potential cost allocation and resulting assessments that may be considered, these are only initial estimates based on an average fifteen foot (15') wide easement area to be maintained along each parcef that abuts the golf course. Ultimately, the initial findings and factors that are outlined in this memorandum will require further refinement if the City decides to move forward with the formation of such a District and the preparation of an Engineer's Report that is required pursuant to applicable assessment district law, specifically the provisions of the Landscape and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (the "1972 Act") and the provisions of Apn! 2, 2013 Page 2 of 13 the California Constitution Article XIIID (the "Constitution") which was instituted by Proposition 218. While our evaluation concludes that establishing an assessment district is a viable approach for the City to consider for funding this landscape easement buffer, in order to address and comply with the findings and determinations outlined in several recent court decisions regarding assessments, the calculation of proportional speciai benefit for each parcel requires a more comprehensive and complex method of apportionment than what may have been utilized in the past for establishing such assessments. Recent court decisions (summarized later in this memorandum) have consistently emphasized the need for the methodology to incorporate into the benefit calculation, specific property proportionality characteristics and simply assessing each residential parcel equally in this particular situation wouid lack that more detailed praportionality. Therefore the proposed initial method of apportionment and possible assessments outlined in this analysis incorporates a calculation of each parcel's proportional special benefit based on each parcel's frontage to the improvements which will ultimately result in each residential parcel having slightly different assessments. However, even this initial estimate of the proportionality may be modified to a proportional square footage apportionment rather than just a front footage apportionment if the final approved landscape easement area varies significantly from the proposed average fifteen foot wide easement. In addition, the provisions of the Constitution requires and recent court cases have emphasized that for any assessment district, general benefits must be separated from special benefits to properties, and the courts have further emphasized that identifying and quantifying these general benefits is as necessary as identifying and proportionately allocating special benefit costs. The following provides a more detailed summary of our analysis and findings, which more specifically identifies the proposed budget and assessments that the City may consider pursuing. Provisions of Assessment Law 1972 Act Assessment Requirements The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, which include but are not limited to the construction, maintenance, operation, and servicing of park and recreational improvements. The 1972 Act requires that the cost of these improvements be levied according to benefit rather than assessed value: "The net amount to be assessed upon lands within an assessment disfrict may be apportioned by any formula or method which fairly disfributes the nef amounf among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements." Apn! 2, 2013 Puge 3 af 13 Key Provisions of the California Constitution In conjunction with the provisions of the 1972 Act, the Califomia Constitution Article XIIID addresses severa( key criteria for the levy of assessments, notably: Article XIIID Section 2d defines District as: "District means an area determined by an agency to contain all pa►�els which will receive a special benefit from a proposed public improvement or property-related service'; Article XIIID Section 2i defines Special Benefit as: "Special benefit" means a particular and distinct benefit over and above general benefits conferred on rea/ property located in the district or to the public at large. General enhancement of property va/ue does not constitute "special benefit." Article XIIID Section 4a defines proportional special benefit assessments as: "An agency which proposes to levy an assessment shall idenfify all parcels which will have a specia/ benefit conferred upon them and upon which an assessment wil/ be imposed. The proportionate specia/ benefit derived by each identified parcel shall be determined in relationship fo the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the property related service being provided. No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel." "Only special benefifs are assessable, and an agency shall separafe the general benefits from the special bene�ts conferred on a parcel. Parcels within a district that are owned or used by any agency, the State of California or the United States shall not be exempt from assessment un/ess the agency can demonstrate by clear and convincing evidence fhat those public/y owned parcels in fact receive no special benefit." Recent Court Cases Regarding Assessments While Article XIIID of the Constitution certainly changed how assessments are imposed, subsequent court cases dealing with such assessments have also molded the approach and determinations of benefits going forward. As background, the following identifies and summarizes the recent court cases regarding assessments and the key findings in those cases that have further defined the provisions of the Constitution and application of assessments: Santa Clara County Open Space Authority (Califomia Supreme Court; July 2008) Y"Special BenefiY' must be particular and distinct: • Must affect the assessed property in a way that is particular and distinct from its effect on other parcels. Apri! 2, 20 f 3 Page 4 oJ 13 ➢ Measured proportionai special benefit: • The assessment engineer's report must measure and reflect the special benefits that accrue to each parcel within the assessment district. A Constitutional Issue for the Court's independent judgment: Courts should exercise their independent judgment in reviewing local agency decisions for determining whether benefits are special and whether assessments are proportionai to special benefits. Robert Dahms vs. Downtown Pomona Property et al. (Califomia Court of Appeal, Second AppeNate District; May 2009) Y Individual assessment discounts: • Nothing in Article XIIID prohibits discounted assessments, and nothing in the article requires that discounts be uniformly granted across all parcels in an assessment district. Rather, what the article requires is that the assessment on a particular parcel not exceed the reasonable cost of the proportional special benefit conferred on that parcel. Town of Tiburon et al., vs. Jimmie D. Bonander et al. (California Court of Appeal, First Appellate District; December 2009) � Proportional special benefit based on entirety of the capitai cost: • Article XIlID expressly contemplates that proportionate special benefit is a function of the total cost of a project, not costs determined on a property-by- property or a neighborhood-by-neighborhood basis. • Proportional special benefit is the "equitable, nondiscriminatory basis" upon which a project's assessable costs are spread among benefited properties. Thus, the "reasonable cost of the proportional special benefit," which an assessment may not exceed, simply reflects an assessed property's proportionate share of total assessable costs as measured by relative special benefits. ➢ Enhancement of property values is not necessarily general benefit The Court noted that Artic(e XIIID's prohibition against basing assessments on general property value enhancements does not mean any benefit that enhances property values is a general benefit. The court recognized that every assessment that confers a particular and distinct advantage on a specific parcel wiil also enhance the overall value of that property in some respect. Such an effect does not transform a special benefit into a general benefit. ➢ Other notable findings: • Shared or similar benefits does not render such benefit to be general • Establishment of Zones must be based on benefit differences not cost differences • Parcels that receive special benefits cannot be excluded from the district Apri! 2, 2013 Page S of >3 Steven Beutz vs. County of Riverside (Califomia Court of Appeal, Fourth Appellate District; May 2010) ➢ Analysis of general benefit is essential (quantify) • Recognizing that the general public may benefit from City parks, the assessment methodology must show how often or to what extent persons who live inside and outside the district may reasonably be expected to use the parks. Persons from surrounding communities may be attracted to the parks in large numbers and on a regular basis if similar park facilities are unavailable in those communities. ➢ Proximity to the improvements should be considered and evaluated �!n any challenge the agency has the burden of proof The validity of an assessment and the burden of demonstrating special benefit and proportionality is always on the agency. Golden Hill Neighborhood Association, lnc. v. City of San Diego (California Court of Appeal, Fourth Appellate District; September 2011) ➢ Supports Beutz court's finding that an engineer's report must evaluate the amount of special bene�t landowners receive, as well as the amaunt of general benefit: • The engineer's report must not include unfounded conclusions that services and/or improvements funded by the assessment district are exclusively of distinct and special benefit to parcels within the district. Certain services and/or improvements—including public lighting— inherently provide a benefit to the general public, which must be reflected in the engineer's report. ➢ Ballot materials must disclose how assessments for property owned by a local agency are calculated; necessary for fair and transparent ballot proceedings, and to avoid disproportionate vote weighting. Benefit Analysis It is important to note that the improvements that would be funded by a praposed assessment and for which properties would be assessed is only for the landscape buffer area along the properties that abut the golf course and not the entire golf course area. This district and the assessments would help ensure that the area immediately adjacent to those properties are maintained at an appropriate level of maintenance of this landscaped area which affects the appearance and use of those properties and will directly benefit the parcels to be assessed. The improvements and the associated costs described in this memorandum have been developed based on a benefit rationale and calculations that allocate the net cost of only those improvements determined to be of special benefit to properties and those costs are proportionately allocated to only those properties within the Palm Desert Country Club that receive a particular and distinct bene�t from those improvements. The Apn! 2, 2013 Page G of 13 following benefit analysis and method of apportionment (method of assessment) is based on the premise that each property to be assessed, receives special benefits from the local landscape improvements and the assessment obligation calculated for each parcel reflects that parcel's proportional special benefits as compared to other properties that receive special benefits. Special Benefits The proposed landscape easement area buffer ("improvements") proposed to be included within a proposed assessment district will provide a visual and virtual extension of each private property's existing frontage along the golf course ensuring an aesthetic continuity and cohesion between the various properties that could not be accomplished individually and will enhance the overall appearance and use of those properties. This landscape buffer area and the maintenance of these improvements will help ensure both a visual and physical local beautification and unification of the properties that will directly and proportionately benefit the properties to be assessed. The location and extent of the improvements in relationship to each of the properties clearly makes these proposed improvements a direct and special benefit to these parcels. It has therefore been determined that the improvements and the related cost and expenses to maintain these landscape improvements (excluding those general benefit costs noted below) are entirely special benefits to the properties adjacent to those improvements and the net annual cost to fund such improvements should be proportionately shared by those properties receiving such special benefits. General Benefits Assessments are established on the basis of calculated proportional special benefit to properties within a district. Because general benefits are not assessable, the improvements and/or associated costs that are considered general benefit must be excluded from the assessment calculation. With respect to this potential District, although the landscape easement area buffer to be maintained is located on the perimeter of the golf course and certainly visible to the general public and may even be in proximity to and occasionally accessed by properties other than those abutting the improvement area (outside the boundaries of the proposed district), the establishment and maintenance of this buffer is specifically and solely for the benefit of the adjacent properties. The general benefit to properties in the Palm Desert Country Cfub area (both those adjacent to the golf course and those not adjacent to the golf course) as well as to the public at large is clearly associated with the overall maintenance of the golf course itself, which is not part of the costs to be funded by the proposed assessments. Furthermore, it has been determined that the establishment of this landscape easement buffer and the maintenance of this area would provide no measurable advantage or impact to any properties other than those directly adjacent to those improvements and it is reasonable to conclude that the maintenance of such improvements are entirely a special benefit to only those properties. Apri! 2, 2013 Page 7 of 13 Assessment Methodology In order to calculate and identify the proportional special benefit received by each parcel and their proportionate share of the improvement costs, it is necessary to consider not only the improvements and services to be provided, but the relationship each parcel has to those improvements as compared to other parcels in the District. Article XIIID Section 4a reads in part: ". .. The proportionate special benefit derived by each idenfified parce/ shall be determined in relationship to the entirety of the capital cost of a public improvement or the maintenance and operation expenses of a public improvement or for the cost of the property related service being provided. No assessment shal/ be imposed on any parcel which exceeds the reasonable cost of the proportional special benefif conferred on that parcel. " Most landscape improvements provide varying degrees of benefit (whether they be general or special) based largely on the extent of such improvements, the location of the improvements in relationship to the properties, and the reason or need for such improvements as it relates to individual properties. Clearly, the proposed landscape easement area proposed within the Palm Desert Country Club is a very specific and localized improvement area that has a direct and particular special benefit to only those properties adjacent to the improvements. This direct proximity to the improvements also suggests that the proportional special benefit to each parcel is also specific and is reasonably equated to each parcel's proportionai square footage of the overaN landscaped area as compared to other parcels. The following provides a summary of the method of apportionment used to calculate each parcels particular and distinct proportional special benefit: Equivalent Benefit Units The method of apportionment established for any assessment district should reflect the proportional special benefit of each parcel utilizing a weighted methodology of apportionment. For purposes of determining an appropriate cost allocation, in this analysis we have utilized a weighted methodology typically referred to as an Equivalent Benefit Unit (EBU) methodology and for this district each parcel's proportional equivalent benefit unit will be based on its proportional share of the total landscape square footage. Because the actual easement area to be maintained has not yet been fully de�ned at this time, for this analysis and an estimation of potential assessments, it has been assumed that the width of the landscape easement to be maintained along each parcel will be fifteen feet (15') wide. Ultimately, the easement area width may be slightly less along some parcels and greater for others, but unless significant variations are identified when the easement area is finalized, (prior to the preparation of the Engineer's Report), the method of apportionment will assume each parcel has consistent fifteen foot wide easement and the only variation in each parcels proportional Equivalent Benefit Unit calculation will be the parcel's assigned frontage. Apri! 2, 2013 Page 8 of 13 Summary of the EBU Calculation for each Parcel The proportional special benefit calculation for each parcel is summarized by the following formula: Parcel's Assigned Frontage x Easement Width = Parcel's EBU The following is a summary of the overall Equivalent Benefit Units calculated for the various property types that are located along the proposed landscape easement area. Developed Residential * Developed Non-Residential OtherVacant TOTAL 841 53,236.68 , ,� . . 1 267.22 �3 856 137.19 798,550.20 : .: 4,008.30 � .� 2,057.85 54,896.32 � 823,444.80 " The average landscape frontage for a Residential lot (both Developed Residential and Vacant Residential parcels) is 63.32 feet. Based on an easement width of 15 feet, this results in 949.74 EBU. Cost Allocations Pursuant to the provisions of the Califomia Constitution, the proportionate special benefit derived by each parcel within an assessment district and its corresponding assessment obligation shall be determined in relationship to the entirety of the capital cost of a public improvement or the maintenance and operation expenses of a public improvement. The following formulas are used to calculate each parcel's Levy Amount (proportional assessment obligation): Step 1: Those improvement costs determined to be of general benefit shall not be assessed to properties within the district and those costs are deducted from the total budget to establish the improvement costs determined to be of special benefit. Total Budget — General Benefit Costs = Total Special Benefit Costs Apn12, 2013 Puge � of 13 Step 2: The Total Special Benefit Costs minus any additional contributions from the City or other revenue sources establishes the "Balance to Levy" for the District. Total Special Benefit Costs — Additional Contribution = Balance to Levy Step 3: The sum total number of Equivalent Benefit Units is determined by the sum of all individual EBU(s) applied to parcels that receive a special benefit from the improvements. An assessment amount per EBU (Assessment Rate) is established by taking the Balance to Levy and dividing thaf amount by the total number of EBU(s). Balance to Levy/Total EBU = Assessment Rate Step 4: This Assessment Rate is then applied back to each parcel's individual EBU to determine the parcel's proportionate benefit and assessment obligation. Rate per EBU x Parcel EBU = Parcel Levy Amount Budget (Cost) Assumptions In this evaluation, Willdan has utilized budget modeling software that establishes an annual maintenance budget utilizing cost per square foot or per unit cost calculations based on a combination of industry standards and historical City expenditures to provide an appropriate and desirable service level. The following budget table summarizes the overall estimated annual budget for the assessment district and the resulting assessment rate per EBU (rate per square foot of landscaped area): Apri! 2, 2013 Puge 10 oj 13 Landscape Maintenance Services (Total) Tree Maintenance Hardscapes Total Annual Landscape Maintenance Services Landscape Water Landscape Electricity Total Utilities —Water 8� Electricity (All Landscaped Improvements) TOTAL ANNUAL MAINTENANCE FUNDING Easement Buffer Rehabilitation Urban Forest Rehabilitation Facilities & Other Irr�rovements Rehabilitation TOTAL ANNUAL REHABILITATION/REPLACEMENT COLLECTION Total Maintenance Funding INCIDENTAL 8� OTHER ANNUAL FUNDING EXPENSES Operational Reserves AdMnistration/Professlonal Fees County Tax Roll Fees Miscellaneous Administration Expenses TOTAL ANNUAL INCIDENTAL FUNDING EXPENSES BALANCE TO LEVY DISTRICT STATISTICS Total Parcels Parceis Levied Total Benefrt Units Claculated Levy per EBU 160,776 13,419 3,121 177,316 30,450 2,436 32,886 $ 210,202 4, 594 13, 500 1,523 19,616 $ 229,818 11,491 29,877 526 304 42,198 $ 272,016 856 852 823,444.80 a 0.330340 Based on the estimated Budget and assessment rate outlined above, the average Residential Lot with an assigned frontage of 63.32 feet resulting in a calculated special benefit of 949.74 EBU would have an estimated annual assessment of approximately $313.74 which is roughly $26.15 per month. ANNUAL MAINTENANCE Apri! 2, 2013 Page 12 of 13 Special Tax vs. Assessment District While the primary objective of Willdan's efforts and the focus of this memorandum has been to outline the feasibility and overall structure necessary to establish an Assessment District for the Palm Desert Country Club landscape easement buffer around the existing golf course area, consideration should also be given to the possibility of establishing a special tax to fund such improvements and costs. Although a special tax requires a two-thirds (66.7%) approval of registered voters to implement compared to the simple majority approval of property owners for an assessment (weighted ballots), the following are some notable distinctions between special taxes and assessments that the City may consider: Advantages of a Special Tax A special tax does not require the detailed support and analysis of special benefit and general benefit required for an assessment and given the recent State Supreme Court decision (Silicon Valley Taxpayers Association versus the Santa Clara County Open Space Authority), judicial review and possible challenges are a greater concem for an assessment than previously was the case; ➢ A special tax can include costs which an assessment cannot (an assessment district cannot assess for general benefit while a special tax is only limited by the purposes specified for the special tax); ➢ The cost allocation structure for a special tax is typically more simplistic than an assessment district. In this case, a special tax could possibly be a simple parcel tax with each parcel being charged the same amount as compared to that of an assessment district that because of special benefit and proportionality requirements, inevitably requires a more complex apportionment of those costs to various properties; y Because the cost allocation structure is usually less complicated for a special tax, public education and informational efforts are usually more focused on the need and advantages of the revenue source rather than explaining the differences in assessments which tend to make the ballot measure less controversial; y Because a special tax does not have the stringent benefit nexus requirements of an assessment district, the boundaries of the potential CFD (special tax district) could be expanded to include most if not all of the properties within the Palm Desert Country Club area thereby reducing the amount charged annually to each property. However, expanding the number of properties to be charged often times makes it more difficult to obtain the necessary voter approval.; and Aprz! 2, 2013 Puge 13 of 13 Advantages of an Assessment ➢ The most obvious advantage for pursuing an assessment rather than a special tax is the simple majority approval threshold, and if multi-family residential property owners (apartments) and non-residential properties are generally supportive of such assessments, the chances for a successful ballot outcome are much better; ➢ Each property is assessed only for their proportional special benefits and benefits compared to other properties. Properties owners tend to be more willing to pay for improvements that are directly associated with their property (a greater sense of connection to the improvements) that directly benefit their property; ➢ Although an assessment requires a more stringent benefit nexus than is required for a special tax, in this particular case, the location and extent of the proposed improvement area in relationship to the properties to be assessed, suggests that a property owner based vote for an assessment is a more appropriate balloting method than a special tax voted on by registered voters (not necessarily the owners of the property that will be obligated to pay); Klassen, Rachelle From: Stendell, Ryan Sent: Thursday, April 04, 2013 8:35 AM To: Klassen, Rachelle Subject: FW: Attention Ryan Stendell; question about PDCC acessment and survay For CC Packets From: marcia�007Ca�aol.com fmailto:marciaa007@aol.com� Sent: Thursday, April 04, 2013 6:53 AM To: Stendell, Ryan Subject: Attention Ryan Stendell; question about PDCC acessment and survay Mr. Stendell, My name is Marcia Powell and I was referred to you by the PDCC Home Owner's Association as the place to ask questions and voice opinions. I apologize for being so late with this inquiry, but we just learned of this matter on March 25 when we returned to Indiana and received the letter from Mr. Wilf Weinkauf about the meeting held on March 24. My sister, myself, and our husbands own a winter home on the golf course at Palm Desert Country Club and this is all new to us. 1. Who owns the Golf Course? Are they the ones requesting this proposed assessment, and what proof have they offered showing the need for such an assessment? 2. How many home owners are involved? 3. How many of the polling letters were sent out, and how were those home owners chosen? WE DID NOT GET ONE. We wondered if only members of the Golf Club were on that mailing list? 4. Will we or the PDCCA have access to the PDCC's financial books? How else will we know if this proposed assessment is necessary? 5. What kind of auditing will be in place? And by whom and at what regularity? 6. Are there other golf courses in the city that have similar assessments? 7. Does the city own the water rites? It was our belief that the we11 that was drilfed and the water reclamation was going to help with the city water that was needed for the course. 8. What are the current water and electric bills for the past year? 9. Will all the money collected from home owners be spent on our golf course? As near as I can figure, that would be some where in the neighborhood of $200,000 annually. 10. If the city is to control and dispense these funds, does the proposed $23 a month include administration fees or are they in addition to the $23. 11. Could there be a time limit on this assessments, such 1 to 3 years, then be automatically voided. 12. If this is put into place, what is involved and how difficult would it be to repeal it? Now for my opinion with what little information I have available: First; let me say that we are very pleased with the condition of the golf course. although many of the improvements were made by the company that built the new homes along the golf course. I don't know if the present owners had to assume those expenses or not, but I would like to know. I thought, with my limited knowledge, that bankruptcy did not pass unpaid bills on to new owners. Second; We don't play golf but, I might be willing to help, if necessary, but I don't like having an assessment added to my taxes. And I object to the amount being nearly as much and possibly more than my association dues. If this is a private company, and I assume it is,then this seems like a bail-out, and we don't even know if a bail-out is necessary. IYs sort of like me asking my neighbors to be assessed so that I can make improvements on my house because that too would preserve their property values. Pease contact me at: 6269 Dalton Rd. Hagerstown, In 47346 or phone (765)489-5169 or email Marciap007 c(D�.aol.com. Thank you Klassen, Rachelle From: Stendell, Ryan Sent: Thursday, April 04, 2013 8:38 AM To: Klassen, Rachelle Subject: FW: Palm Desert Country Club Questions From: Woodieanine(u�aol.com fmailto:Woodieanine@aol.com� Sent: Thursday, April 04, 2013 7:28 AM To: Stendell, Ryan; nhvllisCa�odcca.com Subject: Palm Desert Country Club Questions Mr. Stendell, This meeting notice was handed to me March 26. We were at our home in PDCC October, November, December and January and heard nothing of this. You can imagine my surprise since I did not receive a questioner or have any input pertaining to the figures given. After reading the letter, I hope you will take the time to answer the several questions that have because I am now in Indiana I cannot attend your meetings. Where did the information pertaining to the property owners that would pay this amount come from? How many home owners were notified ? I know we were not the only people that did not receive the first information. Was this list assembled from the Golf Club owners that belong and play golf? How many people responded that make up these percentages and how many homes are involved? Who actually owns this golf course? How much do current club members pay per year to play golf and what does that cover? Does the Palm Desert Country Club Homeowners Association have access to the Golf Club's financial books? Do the individual homeowners involved in this payment have access to the Golf Club Books? How do we as home owners know that all of this is necessary with out this knowledge? Does it take an accountant or a lawyer to get the figures? What are the actual costs for the (1) Water, and (2)Electricity for the fairways only, that do not include the Club House and their grounds? How do you intend to keep these funds ? Will that be in a fund that show the cost for each the water and the Electric each month, each quarter and then reflect the payment? In the percentage options that you mentioned in your letter, does that include the cost of processing all of this? What is that charge to be? You mentioned that this percentage figure could change each year based on the cost of living. Is that based on the national average or on the utilities cost of inflation. ( There is a big difference) Will the owners have any say in these future increases? Will we even be given the notice before it happens? Will these books be open for the home owners to review? Are there other Golf Courses in this city using this arrangement? What about the new well that was drilled recently? We understood that it was to cover the additional water for the PDCC and that recycled water was to be used for the golf club fairway water. What other options have been considered? It is very obvious that the first 2 or 3 years have more equipment and start up costs. Was selling bonds or going public with stock considered? Could this plan to help with the water and electricity be for a limited time frame of 2 or 3 years? After that time it should be able to stand on its own or be reviewed at that time and home owners involved make new choices. Who is Wilf Weinkauf? How many meetings has he attended to explain and answer questions. Why does all of this go through the city of Palm Desert instead of the people managing the course? Personally, I do not want this to be tacked onto my property tax bill. When our neighbor had his solar equipment tacked onto his property tax, it made his home harder to sell. I want to pay this directly and have the option to pay it monthly. quarterly, semi-annually or annually. This property was worth more when it was purchased because of the setting, and having to pay again for the privilege to be on the course is double dipping.... What is the time frame for this proposal? Is this reversible? Is it transferred with a sale? Thank you very much for reading this and I will look forward to your answers. Jeanine Carey Mailing address is Jeanine and Richard Carey, 6481 North State Road 1, Hagerstown, Indiana 47346 Phone number is 1-765-489-4071 Cell 765-238-1032 E-mail woodieanine(a�aol.com ( Not to be given out) LaCross, Mary From: Sent: To: subject: Stanley, Jane Monday, March 18, 2013 3:13 PM LaCross, Mary FW: palm desert country club Hi Mary, Would you please forward this to the appropriate person? Thank you, 7ane -----Original Message----- From: david galie jmailto:au�ie�alie(��mail.com� Sent: Monday, March 18, 2013 2:51 PM To: CityhallMail Subject: palm desert country club RECEIYED 0 ' �f 1'^f PALM DESE�'', CA Z813 APR -8 AM 8= 22 Hello, I live at 43505 texas avenue palm desert 92211 on the golf course. I just heard by chance that a survey had been mailed and meeting set to discuss same.This survey was allegedly sent to all lot owners on the course using county tax rolls. I am on the tax rolls for three years and recently received a mailing from them about automatic reassessments county wide, so I know I am on their mailing list. I was on the hoa board when this matter came up the last two years and have been vocal in my opposition to any assessment. I can only speculate why I did not receive the mailing.Another lot owner, I am told, also did not receive a survey. Regardless of the positions we take on the ultimate matter,fair play would require a second survey, done independently of the golf course, whose immense financial interest in the outcome has oft been stated. If the city goes forward with a vote, on the assumption that the survey was valid, and had been properly done, an expensive city sponsored vote might result in an embarrassing surprise. I can be reached at 760.895.0294 david galie � I 0 MARC// 17,2013 Ras�Y G�rvovFSF 772951►IicH�alv D�vF P,�LM D�T, CA 92211 Crrr Cou�vcr� M�,reERs Crrr ot' P.�1ar D�sFRr 7.�510 fkED W��vs D1R� P.�r�►t D�e7', C�1 92260 RECEIdED 0 CITY CLERK'S OfFICE PALM DESERT CA 2813 MAR 19 PM 4� 18 t.�vcr�En ts A c�rr� I x�ce�vEv txo,�►r r� PRIYAT�' ow�v�xs of P.uar D�s�r COUMRY CLUB REGAA'DI1VG A PRQSPEC7lVE ASSE�.S�Xf AN AROPERTY OWIVERS WHUSE' PRO�PERTY ADJOINS ?ilE GA[F (�llRS� I tF�c r�'Y a�' .�.s�t�►+c us � suesfntzE a PRI{rATE PROtTI' SEEKDVG FMYIY. I Ql1FST/AN OF TNE LEGAl.LITY LF R: T7�E PROPERTY All BELANGs T10 THEM, NOT TH£ CITY. 1�ifE'Y ALONE SNARE !1V ANY PROf7TS t]QOM PAl�J D�SERT COUMXY CL[!B IN REVlL`'Wl1VG TIFIlS LETIER AND D/SCUS�I1VrG THE MA77F.R WJTN OTHERS (OO7SlD1E Of PDrCC) I KNUW Of' ND OTHER C/T�S A1VD PiKlVATi' C�DIlRSES ALLOWINC THIS SllBSlDY. I WOULD APPRECI47E YOUR REi�'WING THE LiGAIJTY OF 7f11�S MATTER AND HFARING FROM YOU REG��RDIIVG TNJS PRO�PIOlSEU .4SSSES:S1�'N!' WfllCfl SF.£.MS 7�U BE QVl'IUDQVG 7rfE Clli: S�vc�tY, Ras�raRY G�vovESF CG 47Y MANAGER PAIJ�I DE�ERT 1 � ��.�y-�� ��s��� �` .�� °_� .� � . �' �_ � >> h �"ii.n!IS�l?C7 ��%O_ . Dear Paim Desert Country qub Resident, Recentfy, we mailed a survey to homeowners a(ong the Paim Desert Country Club. l wouid like thank many of you tor taking the time to compiete and mail-in the survey. We received an overwhelming response of over three hundred and fifty replies. We four�d your feedback and comments to be both informative and extremefy helpful. !n this letter, i would like Lo share wfth you the results of the survey and address some frequently asked questions. I would aiso like to give you an indication of the next steps that we wiil be taking. l look forward to your comments and feedback. Suroev Resutts: Most of you (approximately 90%) felt that golf course conditions had improved over the last year and that you were satis�ied with the conditions adjacent to your property. We we�e pleased to receive such an appreciative respvnse. We f�ave made it our priority to upgrade coune conditioru. We want aur golfers to have a posrtive goifing experience. We want homeowners to feet proud about their immediate environment. We are glad that we are meeting yaur expectations and we thank-you for your input. We wiil continue ta improve golf course tandscaping and esthetics. Seventy four percent of our respondetsts suppor[ed a homeowner's assessment to help maintain the galf caurse and protect property values. Twenty six percent were apposed. This issue generated a numher of comments that I wil) address later in this newsletter. Of those that supported an assessment, approximatefy 6296 supported an assessmertt of $20-25_ An assessment bf $25 was supported by 28%. An assessment of $30-35 was supported by the remaining ten peroen� As for course design — two thirds of our respondents preferred that the existing landscape of the course be preserved. Siightly over thirty per cent favored a change to desert tandscape and very few wanted tfie non-playing areas to be ieft dormant. 6reaue+rtiv Asked Questions: We found your comments to be particulariy informative and helpful. Many of you applauded the changes at the Palm Desert County Club but wondered how an assessment would be structured. The most frequentiy asked questions were as fotiows: 1. How do we insure that assessmer�t funds will always be used for ta�dswpe, maintenance and course upkeep and not applied for any ather purpose� Ans: The fur�ds w1ll go to the City ond noi the course operator. The City w111 inspect the course and insure that it is properly maintofned. ff the course posses the Cit}�s inspection, the funds will be forwa�ded ta the Waier Dtsirrct or Elettricv! Com perny. This will preve►tt some of the pmblems that arose in the pasi ond insure thart there wlll olwoys be a poo/ of funds availoble for basic maiaienance and waterinp. 77-200 California Dr. Palm Desert, CA 922 I I Office: 760.345.0222 Fax: 7b0.345.3444 • . � � � � . ���.Y+�ocortnnlf rnm 2. How will the decision be made about the assesstnent, its amount and tlming? Ans: You wil! moke that decision. A vote wi11 be heid of property owners along the golf course. AllOwnen w!U be maifed o ballot later this year and asked to support an assessment Based vn the survey results, we ore cor►slderfng a monihly assessment of $23. Buf we will be consuftfng the community ond the Ciiy and seeking further feedback Your support and your vo�e will derermine whether chere Fs an assessmeni. 3. Can the assessment ba paid in one or two annual paymants? Wiil it increase over time? Ans: Yes, we will be working wlth the City ro integrnie ihe poyment into your Property Tax Noiices. Any future increases cannot exceed ihe rate of injlation. 4. Why can't this be done through the exiisting HOA7 Ans: Not ol! homes along the course belong to ihe HOA. It would be unfair if some homes olong ihe course had to pay the fee and others didn't We wanr to make sure that all property owners are treated equally. There is a!ot of confusion concerning the HOA. The HOA does not conirlbute funds to the golf course and is nar - - - - � � - oss�it�tea`roine golf course in ariy woy rvfiatsoever. For that reason, we will be seeking your support by way of a vote. 5. Wili hameowners be entiNed to a"sodal membership" and some discounts? Ans: Yes. We want you to enjoy our rlubhouse facilities and we wlll be offering a IO% discount on food and non- alcoholic beverages. There will also be a 10% discount on all pro-shap purchoses. We very much apprecioie your suppart and we recognize that the success of our course depends on your continued patronage and support. Next Steps: We need to continue to work together. We sincerely app�eciate the many wpportive comments that we received. We acknowledge that your property values and the image of our community are directiy related to a successful and well maintained golf course. We believe that the proposed structure wiil insure that the course will be boked after and that the problems of the past will be avoided. We would like to imrite you to an Open House in the Gubhouse at 6qm on March 24"'. Represe�atives of the City will explain the legal and procedural frameworlc for the assessmenL We look f�orward to your thot�hts and comments. I hope that you wili attend. Sincerely, Palm besert Country Gub �/ V `/' V w Wiif Weinkauf, General Manager RECEi�E� � C{iY CLERK'` (?�F10E PALM DESEa � • �A Z013 MAR 2? PM 2� 50 March 27, 2013 John M. Wohlmuth, Palm Desert City Manager David J. Erwin, Palm Desert City Attorney Palm Desert City Council Subject: Special Assessment District Palm Desert Country Club Golf Course On March 24, 2013 I attended a meeting at Palm Desert Country Club Clubhouse that was called to explain the recent survey conducted by the current ownership of Palm Desert Country Ciub Golf Course, regarding maintenance of the golf course and a proposal of a Special Assessment District to be formed to help support the maintenance costs of the golf course funded by property owners fronting the golf course. A representative, Moe Shihota, the golf course owner (one of many unnamed) gave an overview of the re- sults of the recent survey in which he stated that 62% of those responding to the survey were in favor of an assessment on their property to help cover the costs of maintaining the golf course. His statement was that 850 survey questionnaires were mailed to property owners who face the fairways of the course. I have sev- eral friends living south of California Dr. and east of Warner Trail who have absolutely no association to the golf course, but received the above mentioned survey and responded to it. I question how many of the reported 400 responses were not actually from properties that did not face the course resulting in a fictitious 62% favorable response. The letter announcing the March 24, 2013 meeting stated that a representative of the City of Palm Desert would be in attendance to explain the legal and procedural frame work for the assessment district. A City Representative was in attendance but did not speak or answer questions, therefor I request information re- garding Assessment Districts as follows: Where in the California Legislation does it authorize formation of a district that taxes private properties to support a private for profit business enterprise? If such legislation authorizes this type of Assessment District, where is the District and what functions of business enterprise does it cover? 2. Can the authorizing legislation be written to: A. Limit the assessment to the existing owners/operators of the golf course and any change in owners/operator (I.E. sale, lease, subordination, transfer) terminate authorizing legislation? No Grandfathering! B. Can the authorizing legislation be written to specifically state what maintenance costs will be included in the assessment (I.E. utility bills only)? C. Limit any increase in the amount of the annual assessment to 1%? D. Require the re-authorization of the Assessment District every 3-5 years? 3. How many votes will be required to approve the formation of the District? 2/3's of all propeRies involved or 50% of the properties? New taxes requires 2/3's vote of the electorate! 4. What does the City charge for administrating this District? My understanding, City currently charges 26% of the gross annual assessment for administration. Pending your timely response, I remain a concerned property owner seeking answers. v' p`�, -��� Jack L. Forney 76831 Kentucky Ave. Palm Desert, Ca. 92211 760-345-8598 Apri12, 2013 TO: Jan Harnik, Mayor Jean Benson, Mayor Pro-Tem Robert Spiegel, Counci] Member Van Tanner, Council Member Susan Marie Weber, Council Member City Attorney City Manager � RECEIVED 0 CITY CLERK'S OFFICE P� l.N DE�,F�• : � A 2Q13 APR -2 PM 3� 04 �K � y SUBJECT: ASSESSMEN"1' AREA I�OR PALM DESNRT COUNTRY CLUB I�'OR MAINTF,NANCF,, by private business. First of all we are against any ASSESSMF,NT ARF,A BEING FORMED FOR '1'HE PURPOSE of maintaining a golf course that is a private business. We do not want it put on our tax bill. We like what the owner has done with the golf course and we support PDCC at every chance we can. We have never seen the golf course and restaurant so busy. ( We have lived here since 1984). We would not be opposed to some other type of support , such as forming a GOLF COURSC HOME OWNER'S ASSOCIATION. NO NEW TAXES ON OUR TAX BII.I. REASONS TO SAY `NO". I contacted the legal section of the State of California Tax Assessments. Thcy said they could not find any Assessment Area's in the state where A private business would benefit from it. They suggested we fight it at The local arca, City of Palm Desert. Please research "WHA"I''S SO SPECIAL ABOU7' SPECIAL DISTRICTS", A Citizen's Guide to Special Districts in California, H'ourth Fdition, October 2010. This can be obtained on the Committcc's webpage : www�.sen.ca.�ov/loc�ov" Please refer to page 7( attached a copy of this page) `WHO VOTFS/? RF,F�;R TO: US SUPR�;ME COUR"1' CASE: '`Salyer I.and Company v.Tulare I,ake Basin Water Storage District 410 iJ.S. 719 (1973) Why am I yuoting this case, because at a meeting at PDCC , the owner Moe Sihota expressed the opinion that the assessmcnt would be made by the amount of land that the owner had that backed to the golf course. Some may be small, 50' , other parcels could be large 100' . The small lot would have one vote , the larger would have two votes. I think the tJS SUPRFME COURT CASE covers this " Equal votes for each parcel. " Mr. Sihota further stated that the city would mail out the ballots to vote on this matter and that what ever amount was returned it would take 50% of that vote to pass to form an ASSESSMENT AREA. After reading thc complete report on the State's web sitc , I gathered that it would take 2/3 vote to pass. 2. S�,COND REASON: What will this do to many seniors that live here that can hardly pay their taxes now? It will push some over thc edges. I know at least three near my street. I think there must be many more out there on the edge. When Moe Sihota was asked about this , he said he felt sorry for them but there was nothing he would do to help them. 3. My third point and one that many people feel strong about is : If a certain amount is chosen, such as $25.00 per month put on your tax bill every year . How much does the city charge on top of that to manage the assessment? Mr. Sihota was talking about cost of living raise each year. NOW THA"T COUI.D BE A PROBLEM. Does any one remember the Jimmy Carter era. Cost of living went from 5% to 18% within one year. NO COST OF LIVING SHOULD BE INCL[JDF,D. 3A. While we are on the subject of the city over seeing an Assessment area, Where is the trust.? There are only two members of the city council that will remember this. ""The city was suppose to audit the previous owner to make sure everything was going well. THF,Y DID NOT DO SO AND THE PRF,VIOUS OWNER WALK�,D AWAY FROM BANKI2UPTCY OWING $18,000,000. 3. If you want more background on Mr. Moe Sihota just go to "Google" and put his name in. You will find 100's of articles that I think you should read before you make any decisions on a vote to send out a ASS�;SSMENT VO"I�E "1�0 ALL HOME OWNERS. 4. Notification: We reccived a notice from the PDCC that there was going To be a meeting to discuss an Assessment On Our Property ( March 25`n) [t was represented that an official from the City would be there to discuss This. NOT TRUE. Mr. Sihota ran the mecting although a question was asked ,"Who is there to represent the city"? Some young man held up his hand and said hc was only there to listen. Now we found out through the PDCCA that on April 11`h there will be a meeting at City Hall. This came in I'DCCA's ncwsletter. Not evcryone receives this. If you are Snowbird or weekender or don't reccive mail at PDCC you would have not Received this bulletin. HOW ARE THE OTHER 900 homes notified that there is A meeting on the 11 `h. Not on the agenda yet, no notice in the paper . f IO W??`? Is this FAIR to the other homeowners? The final reason : WE BOUGHT AT PDCC IN 1984 because there were no Home owner fees. When you retire, you look to what your costs are going to be in the future. WE iJRGC YOU NO'T'I'O FORM ANY ASSESSMENT AREA FOR THE PURPOS�: OF MAINTAINING 'T'HE GOLF COi1RSE. WA'I'ER OR ELEC"I�RICY. Sincer�ly, ,� ��-r..�`..7 Barbara Powers 76918 Kentucky Ave Palm Desert, CA 92211 760-345-7203 Email, �ourdnower�i)msn.com CC: Page 7 OF Citizen's Guide to Special Districts in California Copy of Inflation Chart From Jimmy Carter Era Table of Contents Introduction................................•-....................................................................................................1 What's a Special District? ...............................................................................................................2 Whata Special District is Not ..........................................................................................................3 A Short History of California's Special Districts ............................................................................4 Special Districts' Statatory Authority .............................................................................................5 Typesof Special Districts ................................................................................................................5 FundingSpecial Districts .................................................................................................................8 Advantages & Disadvantages ........................................................................................................11 Frequently Asked Questions ..........................................................................................................12 Current Topics & Emerging Trends ...-•------------------------------�---.......................................................15 Appendix A: Types of Special Districts .......................................................................................19 Appendix B: Special District Information Sources ......................................................................20 Appendix C: Sources for Questions & Answers ..........................................................................23 Sources& Credits ..........................................................................................................................26 Copvin� this report. What's So Special About Speciul Districts? is not copyrighted. The contents of this report are in the public domain. Although anyone may reproduce this report, but Senate Local Government Committee would appreciate receiving credit. This report also appears on the Committee's webpage: �� ���t-.sen_ra.��uv!loc��ov. What's So Special About Special Districts? (Fourth Edition) Senate Local Government Committee, October 2010 of supervisors appoint the residents who serve on the districts' boazds of trustees to fixed four- year terms. Independent special districts include library districts, memorial districts, mosquito abatement districts, and resource conservation districts. Dependent districts are governed by other, existing legislative bodies (either a city council or a county board of supervisors). All County Service Areas, for example, are dependent districts because their county boards of supervisors govern them. The San Bernardino County Board of Supervisors is the ex officio governing board for the Yucca Valley Recreation and Pazk District, making it a dependent district. Because the Oceanside Ciry Council also serves as the board of directors for the Oceanside Small Ctaft Harbor Distsict (San Diego County), the District is a de- pendent speciai district. A community's registered voters usual�y choose an independent district's board of directors. But in some water districts, political power rests with the landowners. Where the districts' services primarily benefit land and not pcople, the courts have upheld the use of landowner-v�1er dis- tricts. Who votes? The California Constitution says that "The right to vote or hold office may not be conditioned by a property qualification." But state laws provide for some "landowner-voter districts" where the district directors or the voters (or both) must own land within the district. How is that possible? The United States Supreme Court tackled this quesrion in a case called Salyer Lund Company v. Tulare Lake Basin Water Storage District, 410 U.S. 719 (1973). Some landowners and resident registered voters within the District claimed that it was unconsti- tutional to restrict voting rights to landowners. Further, they argued that it was inequitable that smaller landowners received fewer votes than larger landowners. The plaintiffs urged the crea- tion of a new policy so that all residents in the District would be permitted only one vote regard- less of land ownership. The District argued that its irrigation services only benefited the land. Thus, any effects on non- landowner residents were indirect and did not entitle them to vote. Also, the number of votes allotted to landowners was proportional to the assessed value of the land, and therefore relative to each iandowner's benefits and burdens. The Supreme Court agreed with the defendant and upheld landowner-voting because the District "provides no service to the general public." Special districts' goveming boards can vary with the size and type of the district. Most districts have five-member governing boards. Other governing boards vary from three to 11 or more members. Because of its special legislation, the Metropolitan Water District of Southern Cali- fornia has 37 board members. Many larger districts have professional general managers, similar to city managers or county administrators, who run the daily operations. The governing boards adopt the broad policies that the genera] managers carry out. What's So Special About Special Districts? (Fourth Edition) Senate Local Government Committee, October 20l 0 Klassen, Rachelle From: Stendell, Ryan Sent: Monday, April O8, 2013 8:15 AM To: Klassen, Rachelle Subject: FW: PDCC Special Assessment From: JAS. R OLSEN jmailto:iolsen9081Ca�verizon.net� Sent: Monday, April 08, 2013 8:08 AM To: Stendell, Ryan Subject: PDCC Special Assessment �'� � r E�OFFICE� PALM DESER T. CA i�13 APR -8 AM 8� 22 As one of the affected homeowners, my main concern is that this process is moving too fast and I don't believe all of the homeowners have sufficient information to evaluate the pros and cons and make an intelligent decision. I believe authorizing a vote at this time is not in the best interest of the homeowners. If I understand the proposal correctly, it only assures a 15 ft buffer will be maintained and not the entire golf course in the event of closure. This has never been brought out and I am certain that a large majority of homeowners are not aware of this if my understanding is correct. Thank you for your time. James Olsen 77275 Minnesota Ave Palm Desert, CA 92211 Klassen, Rachelle From: Sent: To: Subject: Stendell, Ryan Monday, April 08, 2013 8:15 AM Klassen, Rachelie FW: FW: Golf Course wants funds More PDCC correspondence. From: Jane Malynn [mailto:jfmal2@verizon.net] Sent: Friday, April 05, 2013 6:15 PM To: Stendell, Ryan Subject: RE: FW: Golf Course wants funds Dear Mr. Stendell, REC�IY�D � �ii � (.��xn s �rr��t PALM OESER r. CA 2913 pPR -8 AM 8� 22 Thank you for your quick response. Unfortunately, we live in northern California and are not available to attend the April 11 meeting. However, I may have neighbors who wish to attend so please send us the time and address for this Council meeting. It is interesting that you state that the golf course owners are concerned about the costs of maintaining the "buffer areas" between the golf course and the property owner's property line. We would have thought that the new golf course owners would have been aware of all costs in maintaining the grounds prior to their purchase. They have only been in operations for 1'/z seasons and we feel they should allow more time to really understand their cost measures and prove themselves. They should be thinking of new incentives that help bring more golfers to their course and people to their facilities (i.e. restaurant, bar, banquet/events rooms) that will help to alleviate their cost factors. Obviously, the golfers like the appearance of this newly refurbished golf course. Should the buffer zones become a public access area, how will this be properly supervised? While golfers are playing, will children be able to play on the buffer zone? Will dog owners be able to walk their dogs and who will be responsible for their clean-up? Unsupervised teenagers presently walk in groups while wondering the grounds and smoking. Presently, there are no Marshalls. What is the homeowner to do when there is no policing of this buffer zone when the community and outside groups have total access to it? Best regards, The Malynns From: rstendellCa�citvofpalmdesert.ora fmailto:rstendell@cityofpalmdesert.org� Sent: Wednesday, Apri! 03, 2013 2:23 PM To: ifmal2Ca�verizon.net Subject: FW: FW: Golf Course wants funds Good Afternoon Mr. & Mrs. Malynn, Thank you for your email about the proposed golf course assessment, I will do my best to explain where we are with this proposal by the owners of the golf course. PDCC Golf Course ownership has approached the City with a proposal for an assessment district for the homes along the fairways of the golf course to help contribute to the buffer areas of the course (generally the 15' buffer lining all fairways). They state that one of the biggest reasons the golf course hasn't been successful is due to the wide open fairways which never see a golf ball that also leads to an increase in maintenance costs. Their proposal centers around them dedicating and easement for private benefit of the golf course owners, meaning homeowners would be able to utilize these buffer areas for walking etc. This can be accomplished through the use of a Prop 218 Landscape and Lighting District. The golf course management did present this same information to the City Council in a study session but has not formally acted on whether or not they wish to take on this process. This is what is on the agenda on April 11"' . The vote by the Council is only the very first step in the process and is by no means a vote to form the assessment. Council would be approving staff to put the issue out to a vote of the affected property owners (i.e. fairway homes only). If the City Council approves the item there is a formal process we have to go through with all of the legal noticing and balloting, which do go out to all affected property owners via the address where they receive tax information. I do encourage you to attend the meeting of April 11`h as I believe community input is needed and will ultimately be required through the formal process if the Council wishes to proceed. Please let me know if you have any other questions. I will pass along your email to the City Council for the April 11`h meeting on this matter. Ryan Stendell Senior Management Analyst C�ty of Palm Desert (760� 346-061 I ext. 386 rs[endell@citvofpalmdesert.ora -----Original Message----- From: district4[c�rcbos.or� (mailto:district4(u�rcbos.or�j Sent: Tuesday, April 02, 2013 4:48 PM To: District4 Supervisor John J Benoit Subject: From the District 4 Website WEB FORM SUBMISSION: NAME: Frank & Jane Malynn PHONE: EMAIL: jfmal2@verizon.net SUBJECT: Golf Course wants funds M ESSAG E---- Mr. Benoit, We are a resident of Palm Desert County Club living on Texas Avenue. We would like to inquire as to the legality of a mandatory assessment of homeowners by a private corporation? Can these funds be established and be distributed to a private corporation for their operating costs? Please contact the City Attorney and advise us if this assessment would be legal? We do not wish to participate in such a mandatory agreement. Thank you. RECEIYED 0 CITY C�ERK'S OFFICE PALM DESER', CA April 5, 2013 2Qt3 APR -8 PM 2� 08 Jan Harnik, Mayor City of Pa(m Desert 73510 Fred Waring Drive Palm Desert CA 92260 Dear Mayor Harnik, As a Palm Desert Country Club (PDCC) resident/homeowner for over 35 years, I find it very unsettling to hear that the Palm Desert Country Club Golf Ops LLC (PDCC Golf Ops LLC) is proposing an assessment district for our golf course frontage homes to assist their puy�t�corporation with the maintenance of their business investment. I also am interested in the legality of this proposed assessment district on only a portion of the homes. I hope the City's attomey, David Erwin, is looking into the legal details. The PDCC Golf Ops owners knew going into this purchase the cost of maintenance and utilities, especially since we were told they had operated courses in Canada. tf they did not realize the costs associated with this venture prior to close of sale, then they did not due their "due diligence" in researching the area, the operations and the reality of utilities in our Coachella Valley. If this is the case, they should not be in business and the City should decline any requests for financial assistance, regardless of source. Proposing an assessment against �C golf course frontage homes presents severat questions: 1. What about golfers living in non-course frontage homes or outside PDCC who pay to play? How much will they be charged? 2. What percentage of increase will golf inembers pay since they in fact enjoy the course and may not reside in these homes? 3. Vacation/year-round rentals - they may have to increase their rents to cover added costs, thereby losing potentia! income. Wi!! the City assist them? 4. Residents on fixed incomes. - an extra fee added to the tax bill may seem like nothing, but may put an added strain on an already tight budget. Wil! the City assist these homeowners so they don't face liens or foreclosure? ( understand when the initial survey was mailed, it was not mailed to onty golf-course owners. Envelopes were addressed to the owner or current resident (includes renters) as well as homes east of Wamer Trail, south of California and north of Delaware Place (none of which are fronting the course). Many of the responses from these mailings may reflect what they would like to have, without actually paying for the assessment since they are not on the course. These votes skew the results and should be omitted. If PDCC Golf Ops is such a viable operation, then let the owners find another avenue to maintain the "open to the public" course which they purchased. Put the onus on them. Suggestions for raising their own funds: ` Raise the membership fee by 5-10%. Still a good deal x Raise the green fees for pubtic play by 5-i0%. Still low in comparison to other public courses in the valiey. * Develop a better marketing plan to attract convention groups and visitors throughout the year. Golf play is possible in summer am or twilight. Offering a discount in the dining room or pro shop does not offset what they want to charge, especially if you don't use the club anyway. Then, after another full season/ year, review the financials and make adjustments for continued success. For a private corporation to go before our City Council and ask to assess public citizens to cover their costs of business is no better than the businesses who ask the federal government for a bailout. We, the residents of PDCC, fought to have our area annexed to the City in order to receive increased services. These services did not include "bailing out' a private owner of the public course. The City Council should due its "due diligence" into the corporation's background before making any decision resulting in an additional assessment to property tax on homeowners already stretched by higher fees on utilities and property values which have still not bounced back to assessment levels. I agree it is nice to look out the window and see well-maintained fairvvays, and management has done a good job at reviving a failing course and club. But I also feel the group of investors who formed PDCC Golf Ops failed to research the operational costs for the business. Now they want us to bail them out. At almost 95 years of age, along with many others in the area would like a bail out for a richer quality of life. Thank you ior your time. Sincerely, , � `%�jG�.�— D�'2. Y�4s8—� Marian Rogerson Utah Circle, Palm Desert RECEIVED Q CITY CLERK'S OFFICE PALM DESER?, CA April 9, 20� 3 ��13 ApR -g pM �: 23 TO: Jan Harnik, Mayor Jean Benson, Mayor Pro-Tem Robert Spiegel, Council Member Van Tanner, Council Member Susan Marie Weber, Council Member City Attorney City Manager SUBJECT: ASSESSMENT AREA FOR PALM DESERT COUNTRY CLUB I wanted to state my opposition to creating an ASSESSMENT AREA for PDCC. Frankly, I have been unable to find any precedent for such an ASSESSMENT AREA being created in order to benefit a private party or private business. The fact that the City would administer/audit the Assessment Area, should there be one, does not inspire confidence. We went down that road once before when the City was to monitor an "accounY' of the former owner of PDCC to assure the owner maintained funds for repairs, maintenance, etc. The City did not monitor that account and the result was bankruptcy and several years of living with a dead golf course. If for some reason this Area is created and the City administers it, what would be the additional cost for this oversight? Is there any upper limit on that cost? Another basic question, why should we subsidize a private party, business or enterprise? The new owners were aware of the costs to maintain the golf course when they purchased PDCC. The size of the course hasn't changed, it hasn't increased in size since they bought it, so why should we pay their operating costs? For these reasons I would ask you to vote against forming any type of Assessment Area at PDCC. Regards, John & Patricia Peterson 76-915 Kentucky Ave. Palm Desert, CA 92211 j sp@gregerpeterson. com Klassen, Rachelle From: Sent: To: Subject: More correspondence. Stendell, Ryan Tuesday, April 09, 2013 3:29 PM Klassen, Rachelle FW: Proposed Palm Desert Country Club assessment From: Bruce Crytser [mailto:tahoecees@gmail.com] Sent: Tuesday, April 09, 2013 3:13 PM To: Stendell, Ryan Subject: Proposed Palm Desert Country Club assessment Dear Mr Stendell. RECEIVED � V�� � vr.�.i�i� �i �� PALM DESERI. CA 2813 APR -9 PM 3� 31 I recently received a forwarded email (with your response attached thereto) from a neighbor, and am taking this opportunity to address to you my concerns regarding the proposed PDCC "buffer zone assessment". I have owned a property at the southeast corner of the PDCC Golf Course's 18th fairway since January, 2000, and recently received a survey from the current owners of this golf course. This survey addressed only the overall condition of the golf course and made no mention of "a 15' buffer zone easement for the private benefit of the homeowners along the golf course"*. I am one who responded in a aualified favorable way to the survey letter sent out to affected home owners. At the time, I indicated that I would consider supporting this plan at the $25/month level, provided that a meeting would be held by the Golf Course management and the affected homeowners so that my concerns could be satisfactorily addressed. I was anticipating a meeting between the Golf Course Management and affected homeowners, but now see that this has moved much more quickly than I expected. It would seem that the survey was produced not so much as a starting point for direct discussion with the affected home owners, but was intended to be used by the Golf Course Management as evidence of community support for their plan. In this respect, I feel the intended purpose of the survey was intentionally deceptive, and that my initial pualified support is now being used against me as part of a sales pitch to the PD City Council. According to a"Staff Report (o� Palm Desert Country Club LLD", they "hosted a community meeting at its clubhouse on Sunday, March 24, at 6PM"*. I can assure you and PDCC Management that I received NO advance notice of this meeting. Since I had specifically requested such a meeting as a Comment on my original Survey form, I most certainly would have attended this meeting, of which I was made aware only after the fact, via an email from a neighbor. I have no explanation as to why I should have received the survey, but not the notice of the meeting. So now this issue has bypassed at least this recipient of the original "survey" and already has reached the level of the PD City Council. While I would have been able to attend the above-referenced PDCC-LLD March 24th meeting, I have an unavoidable schedule conflict for the PD City Council meeting of April 18th and will be unable to attend. I very much hope that, by taking this opportunity to contact you in regard to the proposed Palm Desert Country Club LLD, my concerns can be added to those which will be brought before the city council in this matter. As noted above, my original support was conditional. However, I no longer am supportive of the proposed PDCC "Buffer Zone" assessment plan. Should this issue eventually be put to a vote of the affected homeowners, I intend to vote in the negative. As more information (City of PD communications with my neighbors; PDCC LLD Formation.pd� has become available, I wish I could rescind my prior "yes" vote. In the first place, I must question how it can be assured that this 15' easement will be "for the private benefit of the homeowners along the golf course"*. Secondly, I find it difficult to imagine that the cost of maintaining -and now policing- a 15'-wide "buffer zone" would be adequately offset by the PDCC-LLD not having to maintain this same 15' as part of the existing golf course fairway. I see this "assessment district" as nothing more than a homeowner-subsidized revenue stream for a private business. However, my primary concern is that of security. There are numerous points at which the PDCC Golf Course can be accessed by persons other than golfers and adjacent homeowners. For the 13 years I've owned my home, use of the golf course by anyone other than golfers has been discouraged. I admit that, while this has, unfortunately, not been universally adhered to, at least it legitimized the argument for affected homeowners to discourage such use by non-golfers. At one point, we did have a problem with increasing use of the fairways by non-golfers. This then led to groups of middle or high school-age students using the fairways as shortcuts through the community. We actually had several groups repeatedly passing through my back yard and using my gate to access or exit the golf course - even as my wife and I sat in plain sight on our patio. Upon occasion, we even found our chairs moved from the patio out to the tree-shaded grass, with accompanying "snack litter". I'm certain this was not done by my neighbors. At one point, I suggested to a group that they at least exit the course, upon which they were trespassing, at a nearby part of the golf cart path that opened directly on to Wyoming Ave. A few days later, my newly re-stuccoed house was "tagged", and I needed to call the City of PD to have graffiti painted over. I don't want to encourage public pedestrian use of the golf course "buffer zone", and I also don't want to have to consider putting up a block wall to protect my property. It seems to me that I'm facing the prospect of being assessed in order to "purchase" a potential problem of security -in perpetuity. Thank you for your attention to this email, and for your help in bringing my concerns to the Palm Desert City Council. Robert B. Crytser * Quote source: "Palm_Desert_Country_Club_LLD_Formation.pdf' (page 2 of 22)". Klassen, Rachelle From: Sent: To: Subject: Attachments: Stendell, Ryan Wednesday, April 10, 2013 8:48 AM Klassen, Rachelle FW: Letter to City Council opposing Landscape/Lighting District formation Letter to PD City Council re LLD 4-11-2013.doc From: BILL GURZI [mailto:wraurziCa�verizon.net� Sent: Tuesday, April 09, Z013 6:07 PM To: Stendell, Ryan Subject: Letter to City Council opposing Landscape/Lighting District formation Ryan, many thanks for the return call today. I did get your message. Attached is our letter opposing the golf course's attempt to form an assessment district among Palm Desert County Club HOA property owners. A copy of this letter is being sent by mail to the HOA, also. My fervent hope is that the issue will die in Council Thursday, and that the message to the golf course owners will be resounding "no way." If I ever get to Palm Desert on a weekday, I shall stop at City Hall to meet you in person. Until then, you have my gratitude for your support of my queries and sincerest wishes for continued success in your work on behalf of the City's citizens. Sincerely, Bill Gurzi (562) 938-9597 (home) (714) 564-2733 (office) ro � � s � 70 0 s _ � 0 � A �.:� D .� r � = r 1'�'1 vr*,n ^��m v+�c — rn t �"^ m .-'ov � �� a� m4 April 11, 2013 Honorable Members of the City Council City of Palm Desert Palm Desert Civic Center 73510 Fred Waring Drive Palm Desert, California 92260 RE: Opposition to the Proposed Palm Desert Country Club Landscape and Lighting District Dear Councilmembers: The Palm Desert County Club (Club) is showing the City of Palm Desert (City) and the Palm Desert Country Club Homeowners Association (HOA) a rosy picture of the future if an assessment district is approved and funded to defray the Club's operating costs. We ask you to take a look at that same picture without the Club's colorful deceptions. 1. A TAX WINDFALL FOR CLUB OWNERS In a letter dated Apri12 to the HOA (copy attached), the Club confessed that (1) their course is 170 acres while "courses in the Valley average 110 acres," and (2) that 60 acres of easement will preserve the "viewscapes, beauty and value for both golfers and homeowners." Translation: their proposed assessment will shift more than 33 percent of their landscaping and maintenance costs to HOA members, and subsidize walk-in green fees and their members' dues by forming a de facto partnership comprising the Club, the City, the HOA, and other adjacent property owners. We do not wish to be part of any partnership that subsidizes private enterprise with our property tax revenues. 2. NO QUID PRO QUO The Club's members and walk-in golfers benefit through subsidized green fees, but what does the City and the HOA get in return? For everyone to benefit, there must be quid pro quo. To date, however, the Club has yet to offer anything of near-equal value to offset the tax revenue windfall they propose. They claim the City and HOA members will benefit from increased property values, and that any gain in such values since the Club's owners took possession are due to their improvements, but that claim cannot be supported. We bought our home while their fairways were brown, which coincided with the bottom of the housing market in November 2010, before the course was sold. Since the Club owners took possession, real estate values statewide have risen. In fact, the statewide average gain, according to KNX Radio in Los Angeles, is 16 percent for 2012 and 2013 (combined) vs. 2011. We would argue that any gain in HOA property values is a mix of the courses' greening coupled with a return to confidence in California real estate. Which of the two is the greater contributor would be conjecture. 3. A PLANNED GAMBIT In the same letter, the Club's general manager whines that he pays prevailing wages to his employees and pays the same costs as competitors for "seed, fertilizer, gas, etc.," while having to maintain 60 additional acres. In reality, that is the business decision Club owners consciously made by buying the course for, if they choose to remember, a sum far less than the prevailing rate for developed Coachella Valley land. If those 60 acres weren't an issue then, why are they of such great concern now? The answer has already been given by the Club's management at a previous gathering: Club owners planned this gambit all along. It has been their plan from the beginning to woo the HOA and others into a costly golf-course partnership by playing against some residents' fears of returning to "the problems of the past." 4. AN UNLAWFUL PROPOSAL In the same letter, he says our "feedback" has led the Club to reconsider the City's involvement by making the HOA or a"residents' committee" responsible for disbursing the funds. What he proposes is unlawful at best. At a time when municipalities across the country are filing for bankruptcy in unprecedented numbers, the City may not have sufficient human resources to adequately staff the accounts receivable, accounts payable, and annual audit functions that must be processed and monitored diligently to ensure the public's funds are not misappropriated. If the City is not prepared to shoulder this responsibility, especially the regvlar auditing of the Club's operating financial records, any discussions of an assessment district should not go forward for reasonable concern that the funds may not be used as intended. 5. QUESTIONABLE CLAIMS OF SUPPORT The letter brags that "72% of homeowners expressed support for a modest assessment." We have been told by HOA staff that they are receiving many calls from members claiming no knowledge of the previous ballot that the Club distributed, and others say they misunderstood that the Club's proposed $15 to $35 assessments were intended to be monthly, not annually. An assessment of $26Z5 per month, as a mid-range example, would double the current HOA fees of $315 annually. By no reasonable definition is a 100 percent increase, or any amount approaching it, "modest." 6. THE CITY MAY SET A DISAGREEABLE PRECEDENT If the City Council agrees to establish an assessment district, you will be providing a blueprint for other courses in the Valley and elsewhere to copy and propagate. Water prices too high? Create an assessment district? Revenues declining? Create an assessment district! No one can deny that interest in the sport is waning. The percentage of the overall population in the U.S. that plays golf is down over the past 10 years, from 11.1 percent in 2000 to 9.2 percent in 2010, according to the National Golf Foundation. Other courses in the Valley are surely aware of this and are weighing alternatives to consider should the trend bode ominously for them. Is financial support of multiple private golf courses and the monitoring of their use of public funds a responsibility the City wishes to assume in perpetuity? Thank you for taking the time to read this letter. We know your time is limited, but trust you will fold these six points into your deliberations and, ultimately, decline to support the Club's request to proceed further with an assessment district. Sincerely, William Gurzi and Rodney Honeycutt 43675 Louisiana Street Palm Desert, California 92211 Klassen, Rachelle From: Sent: To: Subject: More correspondence. Stendell, Ryan Thursday, April 11, 2013 9:49 AM Klassen, Rachelle FW: April 11 meeting re: PDCC golf course assessment From: Phyllis Harkins �mailto:PhvllisCa�qdcca.com� Sent; Thursday, April 11, 2013 9:41 AM To: Stendell, Ryan Subject: FW: April il meeting re: PDCC golf course assessment Forwarding to you as she said to do so. Phyllis From: Betty Breneman fmailto:betebe777Ca>att.netl Sent: Wednesday, April 10, 2013 11:20 PM To: Phyllis Harkins Subject: April 11 meeting re: PDCC golf course assessment Phyllis - RECErvEo � ^PbLM?�D��fRT��CA t �81� APR i I AM 9� 52 I can't be there for the meeting. I wanted to pass on some thoughts to you in case you deem anything worthy of bringing to the meeting and/or passing on to others. I looked up the word 'extortion' - the definition is "the practice of obtaining something, esp. money, through force or threats". I find it interesting that a private company (PDCC Golf Operation LLC) wants to get money from private citizens (homeowners) to cover the expenses of that company. If the private citizens (homeowners) choose not to give the company the money they're asking for, the company 'threatens' to engage in a practice that would be harmful to those homeowners (i.e. not maintain the grounds adjacent to the homeowners property and therefore causing the homeowners property values to be damaged). That seems to fit the description of'extortion', doesn't it? In the April 2 letter from General Manager Wilf Weinkauf he states "We are determined to thoughtfully structure an assessment that is fair for both the homeowner and golf course." What's fair about having to pay someone else's bills? That's what's being asked of the homeowners. PDCC Golf Course is playing word games and dancing around the legality of it all by drawing in the city of Palm Desert and the PDCC homeowners association. The bottom line is no company should expect other people to pay the company's expenses. The way that's done is by raising prices on the product/service of the company. Their reasoning for wanting the money is that they maintain 170 acres instead of the average 110 acres is not invalid. It's not as if they suddenly became responsible for the 170 acres. They knew the size of the property when they bought it - no surprises. They supposedly are an experienced golf course company - in which case it's expected they would have gone into this with knowledge and preparation to run the company successfully. If they need to raise funds - they should seek partners or sell stock in the company. It's a given that if this goes through, the cost will continue to go up - and the assessment is here to stay. It is simply unfair to demand that people who bought their homes with no obligation or responsibility for the golf course are now being told they must 'ante up' or their property will suffer. (Sounds again like the definition of the word'extortion - which I believe is still illegal!) For what it's worth. Thanks, Betty Klassen, Rachelle From: Stanley, Jane Sent: Thursday, April 11, 2013 1:06 PM To: Klassen, Rachelle; Mendoza, Grace Subject: FW: Request for delay of vote on proposed Palm desert Country LLD;4;00 PM agenda item - ------» ._----- -------- �__. _�.� From: david galie �mailto:auaieaalieCalamail.com� � ��? Sent: Thursday, April li, 2013 12:53 PM � D� To: CityhallMail � r � � Subject: Request for delay of vote on proposed Palm desert Country LLD;4;00 PM agenda item � =rrn _ c7mn � m�rn ;n x _ Council members, � � u, t This letter is to urge you to delay your vote today on this matter. _ -�� o p � .—• c� �, I first heard of this matter by happenstance on March 15th,when I heard of an open house hosted by�e ctu� management set for Sunday the 23rd. Q I did not receive previous letters or the infamous survey.Several neighbors with whom I spoke also denied receiving the survey. If the numerous letters you have received are even close to accurate about the mailings and survey,then the golf course/representatives,charitably speaking, has managed it's mailings and outcomes to suit its purposes. This is the first reason to delay this vote: THE PROCESS IS QUESTIONABLE AND THEREFORE LINRELIABLE. * * The second reason to delay this vote is :THE PROCESS HAS MOVED TOO FAST. You have a letter in the attachments from home owner Jim O1sen.He urges the council to delay a vote as he feels the homeowners have not been given enough information to cast an informed ballot.He is President of the HOA ,long time board member(more than10 years ,I believe) and past HOA office holder. He has the pulse of the community and I urge the council to give great weight to his observations . The third reason to delay a vote is to examine and parse the reasons the course has given for this proposed self taxation. Although the reasons have morphed when challenged,the newest one is that the owners bought too much land, and now want to pawn some of it off,because they don't want the expense of mowing and watering it. The owners retained one of the best golf and resort consultancy firms in North America to advise them on this purchase.They did not just discover the width of the fairways,or the costs of seed,or the prevailing wage.They got a superior investment. Why have we not seen the books?Or accounting statements?Must we believe them at face value, or should we trust but verify? *** The council ordered staff to proceed with this matter and at the same time ordered staff to do a background check on all owners and affiliates. There are problems there, but staff did not do this investigation,or if done,results not made public. Several owners have expressed concern about the vote being held in May. I join in that concern.It is a very bad idea. We want inclusion, not exclusion,in this important matter. Nothing is lost by delaying this vote until after the summer and until the necessary community meetings are held. Several vital matters must be resolved BEFORE the vote,and some have already been raised,such as how would an assessment be charged to the owner;on the tax bill? There are serious issues with this on resale as one owner wrote, comparing this assessment with her experience with solar panels. Perhaps equally important is the question should we divide and separate our community into lots with an assessment, and lots without an assessment? Based on the say-so of the mysterious Wildan,whose expertise and qualifications are also not established. If the Palm Desert Country Club Home Owners Association is to be cleaved in two, then we,the owners,should be permitted to make that call. I understand that many calls have been made to the HOA office about this matter.Some complain about not getting notices,some ask for information about forming a committee to oppose this assessment district. I have spoken with the manager of our HOA and intend to spear-head such a committee. Everything so far has been done at the timing and behest of the golf course. Now we will have a true community meeting(s) to discuss all these issues from our prospective as owners, and on our turf at the community center, moderated and conducted by us, the owners. We are not necessarily opposed to any assessment or other charges ,but we want to know why, how,when,how much,by whom, etc etc. Then we can go to staff and council and give them our survey,our responses, what we are willing to do and how we are willing to do it.We may very well agree to some assistance to the course,if truly needed. Otherwise we must respond to the hard-ball tactics of the owners, and organize all owners to vote NO on the current proposal,which would be embarrassing to staff and to the council. david galie 43505 texas avenue RECEIVED CITY CLERK'S OFFIC � PA t M D�SE�: - � A Palm Desert City Council Meeting April 11, 2Q13 2813 APR I I PM 3� 13 My name is Richard Dodson, I am an architect, and I reside at 43470 Iliinois Avenue, in the Palm Desert Country Club, where I enjoy 60 feet of frontage along the fairway of the 17th hole. I attended the evening meeting held at the PDCC clubhouse on March 24th. At the beginning of the meeting, we were told by the presenters that the PDCC golf course comprised 170 acres, and when compared to other local golf courses, averaging 110 acres in area, it was at a competitive disadvantage in terms of required green-space maintenance. At that time I understood that the problem involved the additional required maintenance of discrete pockets of green-space which were out of play and as the presenter said �never saw a ball". It occurred to me, at the time, that it would have been helpful had the presenters provided a plan graphic indicating exactly those areas they considered outside of play and therefore unnecessary to the use of the golf course. Had they done so, rather than waving their arms and speaking in generalities, it would have also been clear that sandwiched in between the 18 links of the main golf course was a second nine-hole executive golf course, the area of which should be subtracted from the 170 acres before a comparison with competing golf courses is made. I find it hard to believe that the presenters didn't consider that option. They probably did think of it, but ruled it out, preferring to work with the 170 acres rather than a lesser number. I left that meeting with the impression that the presentation had been more smoke and miRors than one of clarity. Yesterday, while reading a neighbor's copy of the City of Palm Desert Staff Report regarding this matter, I learned for the first time that a 15-foot wide easement for "Landscape and Lighting" running along both sides of the fairways, was being considered as the basis for taxation of the 850 homeowners fronting the golf course. I ask you how did we get from discrete pockets of unnecessary green-space to the proposed creation of this taxation easement for partial green-space maintenance? And why is it 15 feet wide rather than some other dimension? Is it that 15 feet multiplied by the lengths of the frontages is equivalent in area to that of the unnecessary pockets of green space? Also the report suggested that the homeowners paying for the partial grounds maintenance would be able to make use of the easement, but it was not specific as to what that use would be. For example, would the 850 paying homeowners be allowed to walk their dogs on the grounds that they are maintaining in this easement — an activity that we are currently told is not allowed on the private property of the golf course? I understand that the golf course owners are pushing for a vote this May — approximately a month form now, at a time when many homeowners in Palm Desert are out of town. I submit that, at this point, we have not been provided with enough information to vote wisely. If the vote were put off until, say, November, more people would be in town, and hopefully the Owners and the City would have had the time necessary to develop clarity. � ���� -�. - Klassen, Rachelle From: Stanley, Jane Sent: Friday, April 12, 2013 8:04 AM To; Klassen, Rachelle; Mendoza, Grace Cc: Stendell, Ryan Subject: FW: Palm Desert Country Club Golf Course subsidy -----Original Message----- From: Bill Cote �mailto:billcote�adc.rr.com� Sent: Friday, April 12, 2013 1:16 AM To: CityhallMail Subject: Palm Desert Country Club Golf Course subsidy I was disturbed at the scam the owners are perpetrating on you and us. The owners said they waited a year to spring this on us, so they could rehabilitate the golf course and surrounding land so we could see how it could be. Then he said they are demanding this assessment to help maintain the extra 60 acres of green- space. Then the shocking part came out when he revealed that whether they get the assessment or not, they will be converting much of the attractive sod, which they are using to sucker us into giving them this tax money, into desert scape. If they intend to convert to desert scape, there is only one reason - Profit. These guys are crooks and at every turn they are beginning to reveal their true motives and deceit. I'm glad you tabled the vote untii September, because the more time goes on, the more revelations they seem to let slip. Have a wonderful day, Bill Cote (760)834-8052 76840 Florida Ave Palm Desert, CA 92211 billcote(�dc.rr.com 1 Klassen, Rachelle F�om: Stanley, Jane Sent: Monday, April 15, 2013 8:25 AM To: Klassen, Rachelle; Stendeli, Ryan Subject: FW: Paim Desert Country Club Golf Course subsidy -----Original Message----- From: Bill Cote �mailto:billcote(�dc.rr.com� Sent: Friday, April 12, 2013 6:06 PM To: CityhallMail Subject: Palm Desert Country Club Golf Course subsidy The calculations of subsidy needed were based on the 60 acres of extraneous sod which is expensive to maintain. There MUST be a condition in the assessment which substantially reduces or eliminates it if the amount of sod maintained is reduced, as the cost to them is thereby reduced and the subsidy would remain the same as presented, so it would become a revenue/profit generator for their company. Be careful, they are setting us up for quite a scam here, unles we're careful Have a wonderful day, Bill Cote (760)834-8052 76840 Florida Ave Palm Desert, CA 92211 billcote�Odc.rr.com � ��� ■ VIRGINIA AVE y �� ALASKA STt ENTRA S BRi ♦ TENNESSEE AVE NM MEM TEXAS AVE -l�1WARNER TRL D laa� 09L = uOUI 01 -1 asJnoo 4100 000d T.,"1111 r CD ca CD 0. -■IRG *t i.5) NI •trn y n N 0 17). 0.cc, 3 O (i 3 CZ') � �• •• — V! Wlu Cfl0�(.4 3 v CD VI CD 0 0 1"F I c 0• I. 'Nut A, 1 S ' r 4./ CECT, yjO4ro NNsvp ICUT rt - .4+ ♦a IOWA ST f m ca 4; O � � D s Z wo II Mr 00 �a = rr+ �TRL TON PNIM i 'm IMM �11 79Min II Palm Desert Country Club District Boundary z , ,w IIN UN IN N MI . . IN NI IN MI + • 11111111u1ng111111 .� h41 • j i 'i V m 8 6 0 V Z 1 i 8- . 13 m-Z fp 11 g( J v ▪ E N m = 0 x CC c 2 O iu 5 J y A 442, 66. "I Irk Page 1 of 1 Chart I: Inflation Is the Biggest Driver of Interest Rates 3-Month Treasury Bill —(P1 annual change 164 144 10to tt* 6^s e�► rx a•. 2.,1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 http://s4.hubimg.com/u/5566787_f520 jpg 3/18/2013 Klassen, Rachelle Subject: FW: October City Council Meeting From: Stendell, Ryan Sent: Monday, October 07, 2013 8:07 AM To: Klassen, Rachelle Subject: FW: October City Council Meeting __...,_._._,..,... _ ._.__..�.�____ From: Moe S [mailto:moesC�telus.net] Sent: Wednesday, October 02, 2013 10:53 AM To: Stendell, Ryan Subject: RE: October City Council Meeting Hi Ryan—apologies for the delay in replying but we've been giving this matter a fair bit of consideration. We've taken into account some of the comments that were made at the last Council Meeting. We've also conducted a complete review(again) of all aspects of our operations.As you may be aware,this June, we submitted plans to the City to redesign and desertscape portions of the course with a view to reducing water and maintenance costs and improving the appearance of the course. We are still awaiting final City/CVVD approval of these plans.We understand that those approvals should be in place shortly. We have also concluded an agreement with the City with regards to relocation of the Maintenance Building.As much as these plans respond to public concerns, we are still awaiting issuance of the final City Building Permits.We think it is important that the City issue final approval so that residents are confident that we are fulfilling our commitments. Our fiscal year end is August 31. We thought that it would be wrong to post Financial Statements that did not provide a complete picture of a full year of operations. Nor did we think it correct to develop a website without finalized course re-design plans (which we expect to be approved shortly). A comprehensive web page can be created thereafter. We have commenced re-seeding of the course and soon residents will be able to visualize the unmaintained corridors adjacent to their homes. We think that this will assist the discussion with regards to a potential assessment. We are also well aware (as are you)that residents prefer these matters to be dealt with in the winter rather than the summer,when there are fewer people in the Valley. Therefore, it makes sense to defer any discussion at an October Council Meeting. I would suggest that we allow for our re-seeding and some of our course re-design work to proceed. In the interim, we will engage in community input efforts and advise you as to a more appropriate time to consider an Assessment District. Feel free to call or email me at anytime. Moe I Z �8 Na l- 1�0 �lBZ • V r�.���J..J� � �� � ' ��t��a3J113�3b�1�� � � �RpM :HUhlTSh�AN FAX NE3. :9516744617 Dec. 29 2088 06:26FM P1 3175Q MacNadu SbeM 1 � 's �-�,g34 ` t/ � � . � • a Phon� 95'E'�^ _ . �✓ !r ���`�{f T ► • r Fa�c 96�,f�- � �<� g.s'�- �'z9 fi���g _ -- - -"'� ��.�' ���� T� ... .. � . ....��.��� . - �._. __ . � __.��_� ,� ��� :��♦ � � f�` ____ _-- - � �� � 9_ �= �� . � �� .� �� _ �s��--�� -.� ��� � ,�: � � � F:��� � �.�� ��,aw,t 0�or ttw�ri.+e► [�PMs�s caeNnent C3 PMaN R�.pi�► o/N��v R�y�1� v 'i Q Q � � � �n •Can� R' —w -- --. .. _____ . .. ....__�.---._ � _� /�� � s .�s' -.� � �� � 4 ,� �,r`,1".E'�-�.--- �� �A , � I / ��/C ,�G/ri�/ie �/'��� _� �,� �r�d � /�� ��.�i�' �a d�s'.�'. / �� G�'y , .r ,� /�,� --��'e�w /�,,,t� �/.d� � ai�'/ it✓�' �+�/Y.a.C'.� 1-- �a .�1�,1/''f/ .c�,,�'.+�i� �,� •-,�.��,.v.+1'r� /� � �v�f'�r' � � . �C 9d l �/!��• ��- IDi! l,.�.t �"�J.n/".�.� .�� /.//�.,� �•d Z1�L-�L9-696 �Ine�na 4l!ay{ dbt��t�0 �6 80 1�0 _ . .e�.,. �.,,�,. ,� .�,�; w RECEIVED 0 CITY CI.ERK'S OF�ICE PA!_M f'�'�:E�, �", CA 18642 Demion Lane #A Huntington Beach CA 92646 20�� �C� -9 PN I� Z� October 5, 2013 City of Palm Desert 73-510 Fred Waring Road Palm Desert CA 92260 �-- ���, ��c ��-� v'� Re : The proposal to assess real property backing to the Palm Desert Country Club (PDCC) golf course I own a property on California Drive that backs to the PDCC (9- hole) golf course . I have enclosed my letter dated March 31, 2013 that I wrote to other property owners also backing to the PDCC golf course . My opinions on this proposal have not changed at all from those which I stated in my letter over six months ago. However, my involvement in this issue has resulted in some other concerns that I now have. I was given a copy of a staff report dated April 11, 2013 prepared by Ryan Stendell, Senior Management Analyst for the City of Palm Desert . One of the recommendations on page one of this report is "Direct staff to conduct background checks on PD Golf Operations, LLC dba: Palm Desert Country Club, including all principles of the Limited Liability Corporation. " I hope a status of this recommendation will be given to those in attendance of the Palm Desert City Council meeting scheduled for Thursday, October 10, 2013 . I spoke to a Mr. Alvarez sometime in September when Stendell was out of town, and he (Alvarez) was not aware of the fact that Moe Sihota, who, it is my understanding, is one of the principals of the owning. entity of the golf course, has a checkered past . If I read the internet correctly (and this is as far as my investigation has gone) , he (Sihota) has been reprimanded for unethical behavior and has been dismissed from the Canadian legislature more than once . I told Alvarez a story which I will not repeat here about what happened to the City of Huntington Beach when they did not do their due diligence on somebody they went into contract with; it was reported to cost them in the vicinity of a million dollars . ' I did not attend the meeting in April 2013 (hosted either by Palm Desert or by the golf course ownership) , but it was reported to me that Sihota in that meeting mentioned the overwhelming positive response by property owners to their proposal for the monthly fee but, when challenged to reveal the survey returns backing up his statement, he let the issue slide . It was also mentioned to me that Sihota was equally evasive when queried as to whether the current golf course owners planned to keep the � course or market it for sale . ($25 per month times 850 homes without even one person playing the course would be nice annual revenue stream to reveal to a potential buyer) . I have also heard Sihota has been buying up property surrounding the golf course for purposes unknown. The owners of the golf course are not naive; they are experienced owners of golf courses, owning others in Canada; and they seem to have a carefully planned hidden agenda that the rest of us need to be sure that we discern. These types of deception seem to me to have been repeated by a recent newsletter from the golf course . It apparently stated that 1) the revised plan for their maintenance building proposed by the golf course has been has now been approved by the city, and 2) their landscaping plan has likewise also been approved. Meanwhile I am hearing that sources within the city say neither has been approved, and that there was in fact an intense verbal battle over the first issue, with the golf course representative storming out . I would hope at the October 10 meeting that we could get a current status report on these two issues . Lastly, the course ownership seems to not be acting responsibly in their current ownership duties, which certainly causes one to wonder whether things would get better should they be given additional responsibilities (eg. maintaining the proposed landscape and lighting easement) . They have apparently closed the 9-hole course, not just for the summer, but for all time . (Or have they? One contact of mine said they were entertaining opening it while they are reseeding the 18-hole course . ) Because of this closing, the 9-hole course has also been neglected in watering, mowing, weeding, seeding, etc . One of my contacts who backs to the course complained about an overwhelming ant invasion of his property due to the resultant dryness of the course. Another has told me that when the little 9-hole course is mowed--mainly as an effort to cut weeds--the dryness of the course also causes the landscaping equipment to. put great amounts of dirt and dust into the air which then falls into swimming pools, onto the windows, etc. I hope that the upcoming meeting will address these problems also. Sincerely y rs, Fre rick P. Kent Enc 1 (1) e:\usedos\wp\golfcrse.wp + , 76932 California Drive March 31, 2013 Dear fellow residents bordering upon the PDCC golf course : The following is an extract from a letter that I sent in response to a survey that I received regarding the PDCC course : "As for your central issue as to whether I would support a subsidy to your golf course operation, the answer is a resounding "No! " I find it quite unbelievable that now even citizens from other countries (Canada, I believe) are requesting help in funding their business operations . This golf course has never had a homeowners assessment in the area where I live and I plan to keep it that way. I would not vote for even $1 per year to help subsidize your course . Once people like you have your hand in the cookie jar, they incessantly want to grab more and more cookies . I believe you bought the golf course for a song. If you can' t make a go of the course, then cut your losses and sell it to someone who can. " I hope that, as affected residents, you will seriously consider this issue when it comes to a final vote. The facts are : o Our homes that were built after the original creation of the course have never paid a monthly fee, and the new owners of the course by law should have been informed of this o Golf course owners have come and gone in the past for reasons other than lack of a subsidy to their business (eg. purchased at too high price, milked the business, managed their funds unwisely, etc . ) o Once a monthly charge is in place, it is sure to increase over time . I personally experienced association dues going from $60 per month to $220 per month over the years, and I decided I never wanted to own that type of property again o As a real estate broker, I can assure you that a monthly obligation on a property does not increase• its buyer appeal If you really want to spend money every month, let' s set up an escrow account, collect these amounts, and hire a lawyer to represent us on this proposal . Sincerely urs, � Fred rick P. Kent