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Staff Report
City Council
Item No. 3.A
Meeting Date: October 26, 2022
From: Charles McClendon, City Manager
Title: Scope of Work for Thousand Palms Fiscal Analysis
City Council
RECOMMENDATION:
This item is presented for information, discussion and direction only.
BACKGROUND:
The City Council, at their Annual Goal Setting Strategy Session held in January 2022 , directed staff to update the Thousand Palms Fiscal Analysis. The Fiscal Analysis, last updated in 2018, provided the fiscal effect of a potential annexation of the City’s Sphere of Influence (SOI) at four stages: immediately upon annexation (Phase 1); at the time 10 percent of the currently vacant land is developed (Phase 2); at the time 50 percent of the currently vacant land has been de veloped (Phase 3); and at build out (Phase 4). It also described how the demand for local services will be met when the annexed area is developed.
The Analysis examined anticipated annual costs needed to serve the future annexation area at the four phases of development including general government and public safety services, projected annual revenues including property, local sales tax , and transient occupancy tax, projected cannabis tax and what the costs and revenues would be for the City should that revenue not be available, one-time revenue sources, and significant one-time costs associated with Fire Department facilities and roadway improvements to bring currently substandard streets to City standards.
A review of the 2018 fiscal analysis was discuss ed with the City Council in study session on August 24, 2022. After discussion, Council provided direction to develop a scope of work for a new fiscal analysis with specific direction to include an analysis of current and proposed development in the easte rn end of the sphere of influence and an analysis of options for the provision of public safety services in the sphere considering both direct provision of services by the City and the use of contractual arrangements at lease in the early stages of annexation.
DISCUSSION:
The following proposed Scope of Work for the fiscal analysis has been identified:
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Annexation Study
• Prepare a work program for an annexation study that contemplates one or more alternative annexation scenarios.
• Review existing related documents.
• Review and analyze the study area’s natural environmental features and constraints.
• Review and analyze current and potential land uses and zoning designations. • Review potential facility and service needs for the study area regarding streets and r oad maintenance, public safety (police and fire protection), parks and recreation, solid waste, library, animal control, and other public services. o Analyze service delivery alternatives for police and fire services to include provision of the services dire ctly by City personnel and compare and contrast with the cost of service delivery through contracts. o Analyze parks and recreation services based on current Desert Recreation District service boundaries and services currently provided through the DRD.
o Compare the costs for street and road maintenance considering current County standard and comparing the costs with established City standards. • Prepare a financial assessment of projected revenues and expenses and the effect on City operations, public services a nd infrastructure for various annexation scenarios and including the identified service delivery alternatives. o Prepare revenue projections including a scenario for development of the land east of Cook and I -10 based on current and planned development in the area.
• Assess and advise regarding existing and pending policies, regulations, and laws that may benefit or impair expansion.
• Provide community outreach, as needed, during the term of the study to respond to inquiries and inform the public.
• Prepare the fiscal analysis report to include recommendations with regard to the City’s potential boundary expansion.
• Present findings and recommendations to the City Council.
FISCAL IMPACT:
There is no fiscal impact associated with this discussion of the scope of work . If the decision is made to go ahead with an RFP the cost of the fiscal analysis will likely be $60,000 to $75,000.