``
Staff Report
City Council
Item No. 2.A
Meeting Date: August 12, 2026
From: Anne V. Ambrose, Assistant City Manager
Title: Desert Recreation District Update - Finances
RECOMMENDATION:
To receive a presentation by staff from the Desert Recreation District on the status of district finances.
BACKGROUND:
On February 12, 2025, the City Council and the Desert Recreation District (DRD) Board of Directors approved two agreements establishing park maintenance and recreation services to be provided by DRD to the city and the property tax transfer mechanism to fund those services following the City's annexation into the District.
Following approval, City staff prepared the required annexation exhibits for submission to the Riverside County Local Agency Formation Commission (LAFCO). However, due to the retirement of DRD's former General Manager and the subsequent leadership transition, the annexation application was not submitted. After the appointment of DRD's new General Manager, Dr. Gabriel Martin, City staff resumed discussions regarding the annexation process. Dr. Martin advised that his immediate priority was evaluating the District's financial position before moving forward.
At the July 22, 2026, City Council meeting, DRD staff presented an update on park maintenance and recreation programming following the first full year of services. At tonight's meeting, Dr. Martin will provide an update on the District's financial condition, and City staff will present preliminary fiscal year-end budget estimates.
DISCUSSION:
The City and DRD executed a one-year service agreement defining the levels of service for park maintenance and initial recreational programming, including the summer aquatics program. Cost estimates provided by the DRD for year one across both programs was budgeted at $1,798,585.88 and year end estimates, based on invoicing received to date for services through June 30, 2026 amounted to $1,860,772.26, or a difference of $123,186.38.
Staff have not yet reconciled with the DRD on any earned revenues from programs offered this past year.
The original services agreement was intended to be a short-term agreement until the annexation process was completed. Since that is not advancing at this time, staff are working with the DRD to execute a new multi-year agreement for services to be brought back to the City Council for approval. Below is a summary of FY 2025/26 expenses and a DRD staffing summary. One main area where costs were underestimated was for water.
Staff are awaiting an updated budget proposal from DRD and will work to better align the costs with budget available.
Park Maintenance Amount
Materials and Supplies $ 32,525.40
Maintenance and Ops $ 517,967.90
Professional Services (DRD Staff) $ 593,567.95
Utilities - Electric $ 231,260.09
Utilities - Water $ 64,862.89
Total Through 5/20/26 $ 1,440,184.23
June Invoices $ 145,233.53
Total through 6/30/2026 $ 1,585,417.76
Recreation Programming Amount
Maintenance and Supplies $ 11,649.46
Programs $ 42,762.57
Professional Services (DRD Staff) $ 211,534.71
Total Through 6/20/26 $ 265,946.74
Aguatics Program Amount
Professional Services (DRD Staff) $ 7,952.86
Materials & Supplies $ 1,314.15
Communications $ 116.75
General Services $ 24.00
CCHS Pool (estimated-awaiting invoice) $ 61,000.00 Total Through 6/20/26 $ 70,407.76
Total Year End Estimate $ 1,921,772.26
Budget $ 1,798,585.88
Difference $ (123,186.38)
Staffing FY 25/26
Park Maintenance FT/PT
# of
Employees
Supervising Park Attendant FT 1
Park Attendant II FT 4
Park Attendant II PT 2
Senior Maintenance Worker FT 2
Recreation Programs FT/PT
# of
Employees
Community Services
Supervisor FT Vacant
Senior Recreation Leader PT 1
Instructor I PT 1
Instructor II PT 1
Recreation Leaders PT 3
Aquatics Program FT/PT
# of
Employees
Coordinator FT 1
Lifeguards PT X
*Number of PT lifeguards unable to be confirmed at the time of this report.
FISCAL IMPACT:
There is no fiscal impact to this report. Updated agreements and/or any budget adjustments if needed will be brought to the City Council separately.
FIVE-YEAR STRATEGIC PLAN:
Goal B: Community Investment