POWER POINTS
CITY COUNCIL
MEETING
FEBRUARY 21, 2023
February 21, 2023
1 City Council Meeting
February 21, 2023
Pledge of Allegiance
1 2
February 21, 2023
2 City Council Meeting
February 21, 2023
Presentations
City Council Meeting
February 21, 2023
P1 – TALUS Update
3 4
February 21, 2023
3 City Council Meeting
February 21, 2023
B1 – Adopt Resolution to Approve the City’s
General Fund Balance and Reserves Policy
5 6
February 21, 2023
4 Reserves Policy
• Adopted in 2018
• Reserves Categorized for Specific Uses
• Periodic Reviews to Determine Adequacy
of Reserve Levels
Current Reserves
Category Target Funding
Committed Reserves
Natural Disaster $ 10,000,000 $ 10,000,000
Economic Downturn 11,000,000 $ 11,000,000 $
Cash Flow 5,000,000 $ 5,000,000 $
Capital Replacement 10,000,000 $ 10,000,000 $
Sub Total 36,000,000 $ 36,000,000 $
Restricted
Pension Trust 10,000,000 $ 10,137,888 $
Unassigned 8,000,000 $ 33,893,325 $
Measure G Unassigned - $ 15,355,043 $
Grand Total 54,000,000 $ 95,386,256 $
As of 6/30/2022
7 8
February 21, 2023
5 Emergency Reserves- Natural Disaster
• Capital Assets –Worth of what we own
• Risk- How much insurance coverage we have
• Natural Disaster Funding- State or Federal Gov’t
contribution
• Recommend increasing target by $5.0 million to
$15.0 million
Emergency Reserves-Economic Downturn
• City has mitigated previous downturns by
adjusting expenditures or with budget
surpluses/reserves
• Applied an annual CPI adjustment to current
$11.0 million target and recommend a $2.0
million increase to $13.0 million
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February 21, 2023
6 Cash Flow Reserves
• Previously utilized revenue to expenditure
analysis to review cumulative deficits
• Percentage of budget method reduces
fluctuations in the number
• Subcommittee recommendation - $5.0 million
minimum target for this category, with the ability
to set at 10% of the revenue budget
Capital Replacement Reserves
• Used to fund capital projects such as repair,
maintenance and/or replacement of aging
infrastructure
• Applied an annual CPI adjustment to current
$10.0 million target and recommend a $2.0
million increase to $12.0 million
11 12
February 21, 2023
7 Unassigned Reserves
• Subcommittee recommendation - $8.0 million
minimum target for this category, with the
ability to set at the equivalent of 2 months of
the operating budget, which currently would
be $11.0 million
13 14
February 21, 2023
8 City Council Meeting
February 21, 2023
B2 – Receive and File Fiscal Year 2022/23 Mid-Year Budget Report, Adopt the Recommended Budget Adjustments, Designate Reserve Funding Allocations, and Approve Additional Discretionary Payment to Pay Outstanding Pension Obligations
Mid-Year Report Content
• General Fund, 2 Internal Service Funds, 1 Special
Fund
• Recommended Adjustments
• Revenues $5,223,000
• Expenses $840,000
• General Fund Reserves Review
• Unfunded Pension Liability Review
15 16
February 21, 2023
9 General Fund Revenues
Revenue Description Adjustment
Property Taxes, RPTTF Pass Through 750,000 $
State Sales Taxes 1,250,000
Measure G Sales Taxes 2,000,000
Building Permits/Public Works Permits 578,000
CSA 152 Assessments 25,000
Building/Public Works Plan Check Fees 260,000
Administrative Citations 60,000
Zoning Change Mitigation Fees 300,000
TOTAL REVENUE ADJUSTMENTS 5,223,000 $
• Property Taxes- Growth in property sales and assessed valuations • Sales Tax- Local spending on taxable goods
• Building & Public Works- Building activity in residential & commercial projects
General Fund Expenses
Expense Description Adjustment
Community Resources 100,000 $
Marketing 105,000
Design & Development 150,000
Public Works 75,000
TOTAL EXPENSE ADJUSTMENTS $ 430,000
• Employee programs and training
• Increased events and technology upgrades
• Additional plan check reviews due to increased building activity • Proactive repairs and maintenance
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February 21, 2023
10 Other Fund Adjustments
• Increased fuel prices
and vehicle upgrades
• Park improvements
• Proactive repair &
maintenance
Fund Name Adjustment
Facility & Fleet Replacement Fund- ISF 130,000
Park Equipment & Facility Fund- ISF 240,000
Library and Museum Fund 40,000
TOTAL OTHER FUNDS 410,000 $
General Fund Reserves
• 100% Fully funded reserve categories
• Balances as of 6/30/2022
Reserve Category Current Target Proposed
Cash Flow Reserve 5,000,000 5,000,000 5,000,000
Natural Disaster Reserve 10,000,000 10,000,000 15,000,000 Economic Disaster 11,000,000 11,000,000 13,000,000
Capital Replacement Reserve 10,000,000 10,000,000 12,000,000 36,000,000 36,000,000 45,000,000
Unassigned Fund Balance 33,893,325
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February 21, 2023
11 Summary of Reserve Categories
• Option 1
Increase by 50%
and fund $4.5M
• Option 2
Increase by
100% and fund
$9M
Category
Currently
Funded
Proposed
Target
Option 1
50% Funded
Option 2
100% Funded
Committed Reserves
Natural Disaster 10,000,000 $ 15,000,000 $ 12,500,000 $ 15,000,000 $ Economic Downturn 11,000,000 $ 13,000,000 $ 12,000,000 $ 13,000,000 $ Cash Flow 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 $ Capital Replacement 10,000,000 $ 12,000,000 $ 11,000,000 $ 12,000,000 $ Sub Total 36,000,000 $ 45,000,000 $ 40,500,000 $ 45,000,000 $ Unassigned 33,893,325 $ 11,000,000 $ 29,393,325 $ 24,893,325 $ Appropriated from Unassigned in 2022/23 6,348,812 $
Additional Discretionary Payment to CalPERS 5,200,000 $ Remaining Unassigned 13,344,513 $
Measure G Unassigned 15,128,658 $
Unfunded Pension Liability (UAL)
• FAC pension subcommittee recommendation
to pay off the City’s UAL with a combination of
Unassigned reserves and Pension Trust
• Recommend a minimum target of $5 million for
the pension trust
• Review the unfunded liability annually and
adjust pension trust as needed
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February 21, 2023
12 Pension Summary
PARS Trust CalPERS
YTD -10.69% -6.10%
3-years 1.86% 6.00%
5-years 3.14% 6.70%
10-years 4.11% 7.70%
Annualized Returns
As of June 30, 2022
Classic Tier Tier 2 PEPRA Tier
Entry Age Normal Accrued Liability $54,300,788 $925,328 $2,912,438 Plan's Market Value of Assets $44,042,560 $1,013,126 $3,184,276 Unfunded Accrued Liability $10,258,228 -$87,798 -$271,838 Funded Ratio 81.10% 109.50% 109.30%
• Unfunded Liability: $10.2M as of
June 2021
• CalPERS outperforming PARS
Trust in investment returns
• Potential savings of $7.5 M if
additional payment is made
Recommendations
• Approve Budget Adjustments
• Designate Reserve Funding Allocations
• Approve Additional Discretionary Payment to Pay
Outstanding Pension Obligations
– Utilize $5M from the Pension Trust
– Utilize $5.2M from Unassigned Reserves
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February 21, 2023
13 City Council Meeting
February 21, 2023
S1 – STVR Program 2022 Update
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February 21, 2023
14 • Characteristics
• Compliance status
• Taxes, Fees, & STVR Program Costs
STVR Program
2022 Overview & 2021 Comparison
• Moratorium – Aug. 4, 2020 to Jun. 1, 2021 via
Executive Order No. 10 & succeeding amendments
• Permanent Ban – May 20, 2021 – LQMC Section
3.25.055
• No new permits have been issued outside of exempt
areas since August 4, 2020
• Existing permits can be renewed, but not transferred
Background
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February 21, 2023
15 1,178 Active STVR Permits – December 2022
17 54
1,107
Homeshares Primary Residence General Permits
December 2022 STVR Permits by Type
Total Permit: 1,178
Active STVR Permits Decline Since Jan. 2021
2021 – declined by 201 permits or 19.38% (from 1,037 to 836 – Jan. to Dec.) 2022 – declined by 81 permits or 9.69% (from 836 to 755) - Jan. to Dec.) 29 30
February 21, 2023
16 STVR Density – Permit Ban Areas
5.3%
4.4% 4.3% 4.3% 4.2% 4.2%
13.7%
11.5%
10.7%
9.5% 9.3% 8.9%
6.2%
5.3% 5.2% 5.2% 5.1% 5.0%
15.4%
11.6% 11.4% 11.2% 11.0% 10.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
JAN-21 JAN-22 MAR-22 JUN-22 SEP-22 DEC-22
Density in STVR Banned Areas
North La Quinta Mid La Quinta The Cove South La Quinta (PGA West) Exempt Areas
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February 21, 2023
17 Compliance Overview Since Jan. 2021
STVR Program: Compliance:
1) Permitting & Licensing; 1) Managing complaints;
2) Tax collection; 2) Conducting investigations
3) Compliance 3) Enforcement
Code updates – Jan. 15, 2021 – enhanced regulations,
enforcement, and fines
STVR Complaints Citywide 2021-2022
Citywide complaints declined by 73% in 2022 in comparison to 2021 324 348
294
85 71 129 56 30
Q1 Q2 Q3 Q4
YoY Quarterly Complaints
2021 2022
33 34
February 21, 2023
18 STVR Citations Citywide 2021-2022
Citywide citations declined by 70% in 2022 in comparison to 2021 77 86
60 15
18 29
18 7
Q1 Q2 Q3 Q4
YoY Quarterly Citations
2021 2022
STVR Enforcement Citywide 2021-2022
70% (50 out of 72 citations) in 2022 were issued to unpermitted properties 9 8
41 9
21 14
6 18
29 18
7 Q-1 Q-2 Q-3 Q-4
2022 Quarterly STVR Citations
Permitted & Unpermitted
Permitted Citations Unpermitted Citations
35 36
February 21, 2023
19 Compliance Activities
• Disturbance – due to noise, generally caused by
large events or gatherings, children running/
screaming/laughing, popping balloons, construction,
slamming doors; excessive parking, bright lights,
trash, unmaintained yard, etc.
• Administrative – operating/advertising without
STVR permit or business license, failure to display
permit on listing, incorrect or missing occupancy limit advertised, failure to report TOT, etc.
STVR Enforcement Citywide 2021-2022
75% (54 out of 72 citations) in 2022 were issued for administrative matters 10 22
15 8 7 7 30
18 29
18 7
Q-1 Q-2 Q-3 Q-4
2022 Quarterly STVR Citations
Administrative Vs. Disturbance
Administrative Disturbance
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February 21, 2023
20 STVR Taxes, Fees, & Program Costs
• Permit/licensing fees and fine collections covered STVR program operational costs in 2021 and 2022
• Citation fine collections spiked in 2020-21 in correlation with enhanced enforcement, but declined in 2022 as overall compliance increased
• In 2022, Permit Ban areas generated approx. 71% of the total STVR TOT revenues, and Exempt Areas generated the remaining 29% (in 2021 PB = 80%; Exempt = 20%)
QUESTIONS
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February 21, 2023
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