City Council, all powers conferred upon him by any statute, by any agreement approved by the City Council, and by any other lawful authority.
D. The novel coronavirus ("COVID-19" or "the virus") is a severe acute respiratory illness that may result in serious illness or death and is easily transmissible from person to person.
E. The United States, the State of California, Riverside County, and the City of Rancho Mirage have confirmed cases of individuals who have COVID-19, first detected in Wuhan, Hubei Province, People's Republic of China ("China"). The virus was first reported in China on December 31, 2019. As of 3:00 PM, March 16, 2020, the World Health Organization ("WHO") has reported 168,019 confirmed cases of COVID-19 across 148 countries resulting in 6,610 deaths.
F. WHO officials now report that sustained human-to-human transmission of the virus is occurring. Transmission from asymptomatic individuals are occurring. Although the majority of individuals infected with COVID-19 may recover without special treatment, serious illness is documented in approximately 16% of all cases. Older people and people of all ages with severe underlying health conditions, like heart disease, lung disease and diabetes, as examples, are at higher risk of developing serious COVID- 19 illness.
G. On January 30, 2020, WHO declared the COVID-19 outbreak a public health emergency of international concern, and on January 31, 2020, the U.S. Department of Health and Human Services declared a Public Health Emergency for the United States.
H. The Centers for Disease Control and Prevention ("CDC") has determined that COVID- 19 presents a serious public health threat, requiring coordination among state and local health departments to ensure readiness for potential health threats associated with the virus.
I. On March 4, 2020, Governor Gavin Newsom declared a State of Emergency due to the number of confirmed cases of COVID-19 in the State of California, and has waived the 60-day time period in Government Code section 8630, within which a local governing authority must renew a local emergency, for the duration of the statewide emergency, and has ordered that any such local emergency will remain in effect until each local governing authority terminates its respective local emergency.
J. On March 10, 2020, the Riverside County Board of Supervisors ratified the County Public Health Officer's declaration of a local health emergency as a result of the County's first locally acquired case of COVID-19.
K. On March 11, 2020, WHO declared COVID-19 a global pandemic, stating: "WHO has been assessing this outbreak around the clock and we are deeply concerned both by Item 3A - Page 14
Resolution No. 24738
the alarming levels of spread and severity, and by the alarming levels of inaction. We have therefore made the assessment that COVID-19 can be characterized as a pandemic. Pandemic is not a word to use lightly or carelessly. It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death. Describing the situation as a pandemic does not change WHO's assessment of the threat posed by this virus. It doesn't change what WHO is doing, and it doesn't change what countries should do. We have never before seen a pandemic sparked by a coronavirus. This is the first pandemic caused by a coronavirus. And we have never before seen a pandemic that can be controlled, at the same time."
L. In accordance with Palm Springs Municipal Code Section 2.20.050(a)(1 ), on March 14, 2020, the City Manager acting as the Director of Emergency Services, issued a "Declaration of the Existence of a Local Emergency," relating to the spread of COVID-19.
M. On March 16, 2020, the County of Riverside announced the death of two residents of the Coachella Valley resulting from COVID-19.
N. On March 16, 2020, the Riverside County Health Officer issued an order generally prohibiting all gatherings within the County with an expected presence of ten (10) individuals, taking place between March 16, 2020 and April 30, 2020.
0. COVID-19 has and will continue to cause conditions of peril to the health, safety, and welfare of persons and property that are beyond the control of the services, personnel, equipment, and facilities of the City of Palm Springs.
P. Preparing for, responding to, mitigating, and recovering from the spread of COVID-19 requires the City to divert resources from normal day-to-day operations, requires the City to modify its normal daily operations in ways to prevent the continuous spread of COVID-19, and has and will continue to impose extraordinary requirements on and expenses to the City.
Q. The City Council hereby finds that the conditions described in the foregoing recitals related to COVID-19 warrant and necessitate the proclamation and declaration of a "Local Emergency" in the City of Palm Springs.
SECTION 2. Pursuant to and in response of the conditions identified in Section 1 of this Resolution, the City Council hereby ratifies and confirms the Declaration of the Existence of a Local Emergency relating to the spread of COVID-19 in the City of Palm Springs, as issued by the City Manager/Director of Emergency Services, attached as Exhibit A to this Resolution.
SECTION 3. During the existence of this Local Emergency, all City officials and employees shall cooperate and coordinate efforts with officials and employees of other Item 3A - Page 15
Resolution No. 24738
Page4
political subdivisions and officials and employees of the County, state, and federal government in bringing the present condition of the Local Emergency under control.
SECTION 4. For the duration of the Local Emergency, until such time as the spread of COVID-19 has been minimized and protective measures are no longer necessary in Palm Springs or the greater Coachella Valley as may be determined by the any state agency having jurisdiction and/or by the Riverside County Public Health Officer, the City Manager/Director of Emergency Services shall take all steps necessary to protect public health, safety and welfare.
SECTION 5. The City Council hereby ratifies the Emergency Order issued by the City Manager on March 17, 2020, that was effective 7 A.M., March 18, 2020, for all individuals living in the City of Palm Springs to shelter at their place of residence excluding activities necessary to provide or receive certain essential services or engage in certain essential activities and work for essential business and government services, attached as Exhibit B to this Resolution. The City Council ratifies the implementation of the Emergency Order through 11 :59 P.M., on April 2, 2020, unless further extended by action taken by the City Council on April 2, 2020, or unless superseded and automatically extended by emergency orders issued by any state or other governmental agency having jurisdiction.
SECTION 6. The City Manager/Director of Emergency Services is authorized to carry out the intent of this Resolution, and the City Council hereby waives such ordinances and regulations limiting the City Manager's authority to incur expenditures exceeding $25,000 as deemed necessary by the City Manager/Director of Emergency Services related to the City's response to the increasing spread of COVID-19 in the community. · SECTION 7. The Local Emergency declared herein shall be deemed to continue to exist until its termination is proclaimed by the City Council of the City of Palm Springs.
SECTION 8. Pursuant to Section 1.06.040 of the PSMC, relating to administrative citation amounts, the City Council hereby determines that the administrative fines imposed by Chapter 1.06 for the first, second, third and any subsequent violation of this Resolution or any order issued by the City Manager/Director of Emergency Services, shall in the following amounts: $5,000 for first violation, $10,000 for second violation, $25,000 for third and any subsequent violation. For purposes of Chapter 1.06 of the PSMC, any violation of this Resolution or any order of the City Manager/Director of Emergency Services shall be deemed an immediate threat to life and safety and shall not require any pre-service citation or courtesy notice to the responsible party for the violation. Nothing in this Section shall preclude the City from pursuing any other civil or criminal remedies available to it by law, including, without limitation, immediate closure of any location that is in violation of this Resolution or any order issued by the City Manager/Director of Emergency Services.
Item 3A - Page 16
Resolution No. 24738
ADOPTED THIS 19th day of March 2020.
David H. Ready, Ci
ATTEST:
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, Anthony J. Mejia, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 24738 is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on March 19, 2020, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Garner, Holstege, Middleton, Woods, and Mayor Kors
None
None
None
Item 3A - Page 17
DECLARATION OF THE EXISTENCE OF A LOCAL EMERGENCY
CITY OF PALM SPRINGS
March 14, 2020
WHEREAS, Palm Springs Municipal Code section 2.20.050(a)(1) empowers the City Manager, acting as the Director of Emergency Services, to proclaim the existence or threatened existence of a local emergency when the City is exposed to an actual or threatened existence of conditions of disaster or of extreme peril to the safety of persons and property within the City and the City Council is not in session; and WHEREAS, the City Manager, as Director of Emergency Services of the City of Palm Springs, does hereby find that:
1. Threatened existence of conditions of extreme peril to the health and safety of persons in Palm Springs are present as a result of the increasing spread of novel coronavirus (COVID-19) across the state; and
2. The federal Centers for Disease Control and Prevention has confirmed multiple cases of individuals who have severe respiratory illness caused by a novel coronavirus, called COVID-19, as well as deaths caused by this illness; and
3. The World Health Organization declared COVID-19 a pandemic; and
4. On March 4, 2020 California Governor Newsome declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for broader spread of COVID-19; and
5. The increase of reported cases and deaths associated with COVID-19 has also prompted the County of Riverside on March 10, 2020 to proclaim a local and public health emergency; and
6. A proclamation of a local emergency will assist in a coordinated public health response to reduce transmission and illness severity, provide assistance to health care providers, coordinate and mitigate public services that may be disrupted from this emergency, and mitigate any other effects of this emergency on the citizens of the City; and
8t896.IH00\3279588'-l
Item 3A - Page 18
7. Under California Government Code section 8630(b) and Palm Springs Municipal Code section 2.20.050(a)(1 ), a proclamation of local emergency must be ratified by the City Council within seven (7) days to remain in effect.
NOW, THEREFORE, IT IS HEREBY DECLARED, that a local emergency now exists throughout the City; and
IT IS FURTHER DECLARED AND ORDERED that during the existence of said local emergency, the powers, functions, and duties of the emergency organization of this City shall be those prescribed by state law, ordinances, and resolutions of the City of Palm Springs.; and
IT IS FURTHER DECLARED AND ORDERED that, without limiting the nature of the foregoing, the City Manager, as Director of Emergency Services, is empowered:
(A) To make and issue rules and regulations on matters reasonably related to the protection of life and property as affected by such emergency; (B) To obtain vital supplies, equipment, and such other properties found lacking and needed for the protection of life and property, and to bind the City for the fair value thereof and, if required immediately, to commandeer the same for public use; (C) To require emergency services of any City officer or employee and, in the event of the proclamation of a state of emergency in Riverside County, to command the aid of as many citizens of this community as he deems necessary in the execution of his duties; such persons shall be entitled to all privileges, benefits and immunities as are provided by state law for registered disaster service workers; (D) To requisition necessary personnel or material to any City department or agency;and ·
(E) To execute all of his ordinary power as City Manager, all of the special powers conferred upon him by Chapter 2.20 of the Palm Springs Municipal Code or by resolution or emergency plan pursuant thereto adopted by the City Council, all powers conferred upon him by any statute, by any agreement approved by the City Council, and by any other lawful authority.
March 14, 2020
APPROVED AS TO LEGAL FORM:
Jeffrey S. Ballinger, City Attorney
89896.HI00\32793863.1
< __;2~~~
David H. Ready,
City Manager/Director of Emergency
Services ·
Item 3A - Page 19
ATTACHMENT 3
Item 3A - Page 20
RESOLUTION NO. _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, PROCLAIMING THE
TERMINATION OF THE EXISTENCE OF A LOCAL
EMERGENCY (NOVEL CORONAVIRUS “COVID- 19”)
DECLARED MARCH 14, 2020; AND RESCINDING
RESOLUTION NO. 24738
WHEREAS, on March 4, 2020, as part of the State of California’s response to address the global COVID -19 outbreak, Governor Gavin Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for broader spread of COVID-19; and
WHEREAS, on March 14, 2020, the City Manager, in his capacity as Director of Emergency Services, proclaimed the existence of local emergency in the C ity of Palm Springs, after determining that the spread of COVID -19 is likely to create emergency conditions of disaster or extreme peril which will be beyond the services, personnel and equipment and facilities of the City; and
WHEREAS, the original intent of the State of Emergency was to implement measures to mitigate the spread of COVID -19, and to prepare to respond to an increasing number of individuals requiring medical care and hospitalization that may exceed locally available resources; and
WHEREAS, on October 17, 2022, Governor Newsom announced that the Covid- 19 State of Emergency will end on February 28, 2023; and WHEREAS, on January 30, 2023, the Biden Administration announced its intent to end the national emergency and public health emergency declarations on May 11, 2023; and
WHEREAS, the City Council has exercised due diligence and has determined that the conditions of extreme peril presented by the spread of COVID -19 have been abated to such a degree as to warrant the termination of the local emergency.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1.
Incorporation of Recitals. That the findings and determinations reflected above are true and correct, and are incorporated herein by this reference.
SECTION 2. Termination of Local Emergency. The City Council does hereby proclaim that the local emergency that was declared on March 14, 2020, by the City Manager/Director of Emergency Services, which was ratified by the City Council on March 19, 2020, via Resolution No. 24738, is hereby rescinded and terminated.
Item 3A - Page 21
Resolution No. _____
SECTION 3. Effective Date. This resolution shall become effective midnight February 28, 2023.
SECTION 4
. Effect on Prior Actions. Nothing contained in this resolution shall be deemed to effect any prior emergency order or any enforcement action taken pursuant thereto.
SECTION 5.
Certification. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law.
ADOPTED THIS ___TH DAY OF ________________, _________.
TERESA GALLAVAN
CITY MANAGER
ATTEST:
BRENDA PREE, MMC
CITY CLERK
Item 3A - Page 22
Resolution No. _____
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, BRENDA PREE , City Clerk of the City of Palm Springs, h ereby certify that Resolution No. ____ is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on _______________________, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF , I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, _________.
BRENDA PREE, MMC
CITY CLERK
Item 3A - Page 23
CITY COUNCIL STAFF REPORT
02/21/2023
SUBJECT:
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) 2023–2024 ANNUAL
ACTION PLAN AND BUDGET DISCUSSION
RECOMMENDATION:
Provide staff with recommendations for the CDBG Annual Action Plan and Budget for the 2023 – 2024 Fiscal Year.
Attachments
Item 3B
CITY COUNCIL STAFF REPORT
DATE: F EBRUARY 21, 2023 BUSINESS & LEGISLATIVE
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) 2023–2024
ANNUAL ACTION PLAN AND BUDGET DISCUSSION
FROM: Teresa Gallavan, Interim City Manager
BY: Community & Economic Development Department
______________________________________________________________________
SUMMARY:
The CDBG Annual Action Plan (AAP) is prepared by the City every year pursuant to requirements set forth by the Department of Housing and Urban Develop ment (HUD).
HUD mandates that units of government receiving federal housing and community development assistance must prepare an AAP as part of the implementation of the Five-Year Consolidated Plan (ConPlan) which serves as the blueprint for community development activity in the City. At this time , staff is seeking input from the City Council regarding the Annual Action Plan and CDBG Budget for the 2023-2024 fiscal year.
RECOMMENDATION:
Provide staff with recommendations for the CDBG Annual Action Plan and Budget for the 2023 – 2024 Fiscal Year.
BACKGROUND:
Palm Springs is an “entitlement city”, meaning that it is a direct recipient of CDBG funds from the federal government. The CDBG Program was adopted by Congress forty -nine years ago to provide a flex ible fun ding source for local governments to meet the community development needs of their low and moderate- income (Low/Mod) residents and was the first federal block grant. This direct grant from HUD enables entitlement units of governments to fund three national objectives: benefiting Low/Mod persons; preventing or eliminating slums or blight; and, meeting urgent need.
HUD provides the five models to identify and select sub-recipients for CDBG funds. These are:
Model 1: Formal application or request for application process Model 2: Simplified or limited application
Model 3 Grantee survey of qualified organizations with direct solicitation Item 3B - Page 1
City Council Staff Report
February 21, 2023 – Page 2
CDBG 2023 – 2024 Annual Action Plan
Model 4: Response to unsolicited applications
Model 5: Review of existing sub- recipients’ perfor mance before ren ewing t heir participation
In Fiscal Year 2020, the City Council directed staff to utilize Model 3. Model 3 allows the City to directly select the sub -recipients, which may include only City Departments for funding of City programs, services, or capital projects. At that time, the City Council also approved the 2020-2024 ConPlan goals listed in Attachment 1.
STAFF ANALYSIS:
At this time , it is estimated that the City will receive a CDBG allocation of $425,000, which is t he same amount of CDBG funds rece ived las t year. This amount will be updated accordingly once HUD releases the FY 23-24 CDBG entitlement allocations.
Of the total amount of CDBG funds anticipated for Fiscal Year 2024 ($4 25,000), t he Federal statute requires that at least 70% of the expenditures benefit Low/Mod persons.
As an entitlement grantee, the City has and will continue to utilize these funds for neighborhood revitalization, preserving decent housing, expanding economic opportunities, and/or improving community faci lities and ser vices, principally to ben efit Low/Mod persons. A map showing the City’s Low/Mod areas is provided in Attachment 2.
There are also statutory limitations on the percentage of CDBG funds that may be utilized for Administrative purpose s which i s capped at 20% of the entitlement, an d Public Services at no more than 15% of the entitlement. The remaining 65% of the funds are to be utilized for other program activities such as Public Facilities and Capital Improvements, and Housing Rehabilitation.
It is estimated the CDBG budget for 2023-2024 by eligibility category is as follows:
ADMINISTRATION (20%) $ 85 ,000
PUBLIC SERVICES (15%, includes Fair Housing) $ 63,750 REMAINING PROGRAMMATIC FUNDS (65%) $ 276,250
TOTAL ESTIMATED CDBG 2023-2024 FUNDING $425,000
Expenditures for Administration and Public Services may be used to fund Non- Administration, and N on-Public Services p rograms. However, expenditures for Administration and Public Service programs are limited to the amounts shown above.
Item 3B - Page 2
City Council Staff Report
February 21, 2023 – Page 3
CDBG 2023 – 2024 Annual Action Plan
Recommended Allocations by eligibility category are as follows:
Administration
(20%)
Public Services
(15%) Program Funds
Expenditure Limit 85,000 63,750 276,250 Transfer In From Other Category 13,750
Proposed Allocation
Staffing and Contractual Services 85,000
Public Services (Fair Housing) 50,000
Transfer Out T o Programmatic
Funds - 13,750
Total Allocation 85,000 63,750 290,000
It should be noted, the recommended allocation o f funds for Public Services is for a mandatory program of providing Fair Housing services.
In recent years, the City utilized CDBG funds for Public Facilities an d C apital Improvements projects including:
• City of Palm Springs Public Works & Engineering – Shade structures at Demuth Park and Baristo Park within the Low/Mod areas of the City were al located $279,000.
• City of Palm Springs Public Works & Engin eering – D emuth Park Community Center Air Conditioning Project which was allocated a total of $270,000.
• City of Palm Springs Public Work s & Engi neering – Demuth Park Restroom Project which was allocated a total of $302,240.
Two p otential p rojects f or t he 202 3 – 2024 Fiscal Y ear might include either of the following:
1. Housing Rehabi litation. Under this program the City would provide grants to qualified low to moderate- income homeowners to make needed home improvements. Grants are available t o address code deficiencies, eliminate blight, and improve handicapped accessibility. The maximum grant amount will be $15,000 per household and will be provided on a first-come/first-served basis to qualified applicants. To participate, the property must be located within the City of Palm Springs, it must be owner -occupied, and owners must meet income requirements. Grant funds may only be used for costs of services and materials necessary to carry out City approved repair work. If selecte d, this program would include both Minor Repairs ( repairs below $1,500) and Major Repairs (repairs between $1,500 and $15,000). If this program is not selected, it is recommended Item 3B - Page 3
City Council Staff Report
February 21, 2023 – Page 4
CDBG 2023 – 2024 Annual Action Plan
$10,000 be allocate d to continue the Minor Repair Program to assist very low - income homeowners with minor routine maintenance, emergency repairs and accessibility modifications at nominal costs, including other related health and safety code work.
2. Navigation Center. The Navigation Center at 3589 McCarthy will se rve Low/Mod income clientele. T he Cit y and County h as received Homekey 2 funds for the buildout of 80 modular units and two of the three buildings located at the Navigation Center. The third and largest building (25,800 square f eet) is not included in the funding application and will require additional funds for future renovations. It is antic ipated that such im provements would utilize the entire amount of CDBG Program F unds ($290,000). For a capital project of this scale, $290,000 would be a relatively small amount of funding but would still carry the administrative burden of administering CDBG programs.
Staff will incorporate City Council’s recommendations for use of the CDBG funds into a draft CDBG 2023-2024 Annual Action Plan and Budget and will seek approval of the CDBG 2023-2024 Annual Action Plan and Budget as follows:
• March 23 – Public Hearing #1 to solicit p ublic input on the Draft Fiscal Year 2023-2024 Annual Action Plan and Budget.
• March 24 to April 23 – 30-day public review of Fiscal Year 2023- 2024 Annual Action Plan and Budget.
• April 27 – Public Hearing #2, Council approval of Fiscal Year 2023-2024 Annual Action Plan and Budget.
• May 4 – Submittal of Fiscal Year 202 3-2024 Annual Action Plan and Budget to HUD for review and approval.
• July 1 – CDBG funds available for use (reimbursement basis).
ENVIRONMENTAL IMPACT:
The recommended ac tion does not result in a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a Project means the whole of an action, which has a potential for re sulting in either a direct physical change in th e envir onment, or a reasonably for eseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: ( 5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
Item 3B - Page 4
City Council Staff Report
February 21, 2023 – Page 5
CDBG 2023 – 2024 Annual Action Plan
FISCAL IMPACT:
This action is a pre -requisite to ensur e the City can receive approximately $425,000 in CDBG entitlement funding.
REVIEWED BY:
Department Director: Jay Virata
Deputy City Manager: Flinn Fagg
City Manager: Teresa Gallavan
ATTACHMENTS:
1. 2020-2024 ConPlan Goals
2. Low/Moderate Income Census Block Map
Item 3B - Page 5
ATTACHMENT 1
CONPLAN GOALS
HOUSING GOALS
GOAL 1: REMOVE CONSTRAINTS THAT HINDER T HE PRODUCTION AND
CONSERVATION O F AFFORDABLE HO USING UNITS AND ASSIST IN THE
DEVELOPMENT OF HO USING OPPORTUNITIES AND ACCE SSIBILITY FOR ALL ECONOMIC LEVELS IN THE CITY.
GOAL 2: PROVIDE SUPPORT SERVIC ES FOR THE CITY'S RESIDENTS TO ENSURE
THAT ALL HOUSING P ROGRAMS ARE AVAILABLE WITHOUT
DISCRIMINATION ON THE B ASIS OF ACTUAL OR PERCEIVED RACE, COLOR, RELIGION, SEX, NATIONAL ORIGIN (I.E., PLACE OF ORIGIN,
IMMIGRATION STATUS, CULTURAL OR LINGUISTIC CHARACTE RISTICS,
OR ETHNICITY) , SEXUAL ORIENTATION, GENDER IDENT ITY, GENDER
EXPRESSION, ANCESTRY, DOMESTIC PART NER ST ATUS, MARIITAL
STATUS, AGE, HOUSEHOLD COM POSITION, INCOME, SIZE, PHYSICL OR
MENTAL DISABILITY, MEDICAL CONDITION, OR ANY OTHER ARBITRARY FACTOR.
HOMELESS GOALS
GOAL 1: SUPPORT OR PROVIDE FUNDING FOR PROGRAM S THAT OFFER
SERVICES AND/O R SUPPOR TIVE HO USING TO AS SIST HOMELESS
INDIVIDUALS AND/OR FAMILIES
NON-HOUSING GOALS
GOAL 1: ESTABLISH NEW AND/OR EXPANDED COLLAB ORATIONS WIT H LOCAL
SERVICE PROVIDERS ON PROJECTS AND PROGRAMS THAT REDUCE
THE EFFECTS OF P OVERTY AND SERVES SENI ORS, AT -RISK YOUTH ,
SEVERELY DISABLED ADULTS, AND SPECIAL NEEDS POPULATIONS
NON-HOUSING COMMUNITY DEVELOPMENT GOALS
GOAL 1: PROVIDE PUBLIC FACILITY IMPRO VEMENTS THROUGH DESIGN,
ENERGY-EFFICIENCY, REHABILITATION AND NEW CONSTRUCTION
ECONOMIC DEVELOPMENT
GOAL 1: P ROMOTE, MAINTAIN AND/OR EX PAND THE CITY’S ECONOMIC BASE
THROUGH ECONOMIC AND EMPLOYMENT OPPORTUNITIES TO EXISTING
LOCAL BUSINESSES AND PROSPECTIVE BUSINESSES
Item 3B - Page 6
Attachment 2
Item 3B - Page 7
060659414003
060650446023
060659412002
060659414002
060650445221
060650447021
060659408001
060650446062
060650446021
060650446042
060650447011
060650447012
060650448041
060650448061
060659410001
060659410002
060650446052
060650445211
Sources: Esri, HERE, Garmin, Intermap, increment P Corp., GEBCO, USGS, FAO, NPS, NRCAN, GeoBase, IGN, Kadaster NL, Ordnance Survey, Esri Japan, METI, Esri China (Hong Kong), (c) OpenStreetMap contributors, and the GIS User Community
City of Palm Springs
Low and Moderate Income Areas with City Owned Overlays
Legend
Right-of-Way
City Owned Property within LMI
Low and Moderate Income Areas
Census block groups where over 51% of population is LMI.
Facility Name
A Sunrise Park/Stadium
B Skate Park
C PS Senior Affordable Apartments
D Police Station Complex
E Visitors Center
F Baristo Park
G Fire Station #4
H Waste Water Treatment Plant
I Demuth Park Community Center
A
B
C
D
E
F
G
I
H
Item 3B - Page 8
I
l-'oa41e,-, SAN GORGON/0 PASS
'?a,- <,.\ BANNING PASS
,0
, ,
~
<
,.,,,.
Folly Puk
IOBl5tl,
' ?-"/~
S..nlil ~-Sen
J .,.,. -uni:. .. ,
Na111na! t,l<>1•un11n1
, ., '.h
1 C
¥ d
ii
~
i •
White Water
I . I .• I
Sen JOClfltO Peak
. l 1111
10331 ft
Uar,nn .Un11r1,.,,,,
Sad(
June
Pe,n ea Fl II
}
•• .\1~s10n Creu !fd j!
\ ,
./
243511
-
WCS!slde Dr
Sunns" Or
ro"View Dr
••
~---
' -
ol\l-'1ure 01
"""
• " C
e
i
G;-:irllt
Chino Creeir
•
$
C
"
C
:-•.
Pierson Blvd
1 • . I .,
~
& ~~ ;
;f ::
' .. ~ f 0 !,.I
• • ~ ,,
C
' "' C
• , •.
Smokll Tree Rd
••• Bane l Cal;ll.6 Rd
D11bn Rd
Chino Canyo11
Ta(;hevsh Ca11yon
•
"" ~--!----------~
Tithgu,tz Peek
i >
South Ridge
,,
i •
7643 fl.
South
Peek
,•
' ' '
.. ... • -
Murrey Canyon
,,
"' .
'' t'
Sen• R::uB
Sam.J-,,;mti,
~tiunuona
Natc..at Monu""'rt
,~ ••
"'• . "' ¾, D
'
~
C
• 0
<
' • • 0
" z
f404tl
•
,, ,...
111h Ave
scenie Or
' •
' ~
!i
1411!A~
161h Ave
W Slevens Rd
' >
• C
~ ,
>
z
,. ,.
O"Oonnel
Goo
Club
..
6 C
~
8 C
' • z
Z z
• ,i' l.liHDn
(J:p Ulket
'i,Caumry
;;".i Club
• ' ._ ~
l,"5son Lakes Blvd
~
13th Ave •
~
0 ""
o,11on Rd
Thumb Or '
•
0 t: Francis Or
• §
e
0 f
• • • "
f z
••• Z l·l;udy
2 • ~
s
C
•
• J
•
""rlt E T.imansk Rd
E Gronvl .:i V.ilmonle
E AleJO Rd
E Am.:iao Rd
'l:-""'
' ' J
• !ndOln
0 ' 1
i z
00 C.1n)'QRI
Goll Re110rt
Not1h
0 ~
0 e
•
Agua C111 .. n1o E 8:lger1 r,1
PALM CANYON
,.
'
e
0 • ' ~
~
0 • " 0
e
• ~
~
• " 0
,,. • ~
• 5
• ....
~ IJJ
Jr
, m
0 ~ ,:
·~ 0
1 ~ ,.
~ \
,;:."' \,
v'
-. ,
•------ ------~
0 ~
81h St 8
71h St
Pierson Blvd
6 th .St
51hSI
De sert Hot
Springs
4th St
1,;tSt
Acoma A,~
Buena VIS.I.I Ave
Ca t1uilb Ave
Desert Vtew Ave
Ironwood Dr
15th Ave
~
• ~
~
!
' • f
0 ' ~---
~
Hacie n:la Ave
Cam1ro Campanero
j
~ Camino Campeo,1111J
j
~
•
Otllon Rd
20111 Ave
0 E
~
0 g
!~ o,
o>
~
' <
t C.-imn:, ld1hl.l
• <
0 ~~ • E
•'~ •• •
0 • 0 • • • , • I
18th Ave
Duer1 Dunea
GolfCOUrM
,
/' , ,
. " ..... ' ,,. ... • co..,uy > C•o
' ,a
§
~
Sand• RV
and Golf
~~-
Pilon Rd
cat Claw Rd
Sl=Vl=N PAL
201h A,e
WIiiow H
...
Flot Top Mo1111f11,11
~hoq'"III ,f:
CouraryClub.:t) Fa.,.:h11:h Bel
A11G-n1
Tcmmr
'="" B11IA11
GtHn,
E sonorn Rd
• 0
"
>
•
' ' e <
~ • •
Wa"tlot'O,rf) Con,1011
Kori< Oougl.J.i.
.. ,
Vsst.J Chno
Club
.. " •.. •• •· '• •• t
Oeser! La~es Dr
Mur,ay HIii
Rock Conyon
Vemre Rd
Ol.lJO Rd
Pllmeta Rd
O.•"
Pr1nc11H
Coumry
Club "'
f ~
c,,..,,..,,,
Goll Rlsort
""'
f&t,,:iu1zC-k
Gol!Re110rt
? •
~, ~
'\-ess Dr .,
ii
t e
~
r
M::Callum \'i.Jy f
~
>
• • •
0 • 0
• 0
•
I
'
8.lrasto Rd
J3
CITY COUNCIL STAFF REPORT
02/21/2023
SUBJECT:
APPROVAL OF SCOPE OF WORK AND AUTHORIZE REQUEST FOR
QUALIFICATIONS (RFQ) FOR ARCHITECTURE AND DESIGN SERVICES FOR THE PALM SPRINGS PUBLIC LIBRARY RENOVATION, CITY PROJECTS 16-08 AND 19-18
RECOMMENDATION:
Review and approve the additional unfunded Scope of Work to be included in the RFQ and authorize Staff to advertise and solicit through an RFQ process for the Palm Springs Public Library renovation project, City Projects 16-08 and 19-18.
Attachments
Item 3C
CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 21, 2023 BUSINESS & LEGISLATIVE
SUBJECT: A PPROVAL OF SCOPE OF WORK AND AUTHORIZE REQUEST FOR
QUALIFICATIONS (RFQ) F OR ARCHITECTURE AND DESIGN
SERVICES FOR THE PALM SPRINGS PUBLIC LIBRARY RENOVATION, CITY PROJECTS 16-08 AND 19-18
FROM: Teresa Gallavan, Interim City Manager
BY: Jeannie Kays, Director of Library Services
SUMMARY:
This action requests Council to authorize the advertising and soliciting of a Request for Qualifications (RFQ) for the Palm Springs Public Library renovation project to include the Palm Springs Public Library Main Library building (City Project # 16 -08) and JC Frey building (City Project #19- 18). An additional unfunded Scope of Work is recommended for inclusion in the RFQ by the Library Board of Trustees and may be incorporated into the project and/or a future phase of the project.
RECOMMENDATION:
Review and approve the additional unfunded Scope of Work to be included in the RFQ and authorize Staff to advertise and solicit through an RFQ process for the Palm Springs Public Library renovation project, City Projects 16-08 and 19-18.
BACKGROUND:
On March 10, 2022, City Council approved the application submission of “Building Forward: Library Infrastructure” grant for the Palm Springs Public Library, located at 300 S. Sunrise Way (Main Library) . The grant cover s costs associated with critical maintenance and infrastructure projects, defined as those needed to keep existing facilities, building-related structural components, and related building systems suitable for public use and compliant with all prevailing codes, rules, regulations, and standards governing their usage, such as the Americans with Disabilities Act.
On September 12, 2022, the City learned that it wa s awarded $6,569,942 in matching funds for the Palm Springs Public Library Renovation project. (Attachment A) Item 3C - Page 1
City Council Staff Report
February 21, 2023 – Page 2
Scope of Work and RFQ for Library Renovation
City Council adopted Resolution 25056 (Attachment B) on September 29, 2022, agreeing to the grant, which required 100% matching funds for the project. Per the grant guidelines, all grant-funded work must be completed by March 31, 2026. Grant funds and City matching funds total $13,136,884. Matching funds are held in Fund 260, Measure J.
Grant funds will be disbursed from the California State Library as the project progresses.
The California State Library Grant Program has a list of unallowable costs (Attachment C); however, the Library Board of Trustees advises there are many renovation elements important to include, although the grant funding award will not cover the costs. At their December 7, 2022, meeting, the Library Board of Trustees asked the City include in the scope of work all non- grant funded recommendations made by the Trustees. (Attachment D)
Additionally, the Trustees recommended the City move forward with the plan to renovate the JC Frey building according to the approved Meas ure J budget and present back to the Library Board with a plan and a confirmed budget. The Trustees asked, however, that the JC Frey Building renovation not impede on the Main Library renovation. (Attachment E)
At their January 11, 2023, meeting, the Library Board of Trustees asked that the City focus on hiring the consultants and designers as soon as possible to keep this project on track. (Attachment F)
At their February 1, 2023, meeting, the Trustees confirmed their desire to have all items included in the Scope of Work (Attachments G and H) a nd added to include future proofing electrical and plumbing work in the case of potential additional expansion work.
The Library Board of Trustees recommended Scope of Work is as follows:
1. JC Frey Building rehabilitation and renovation
a) Correct any building deficiencies
b) Create single-use gender neutral restroom(s)
c) Move equipment closet inside front door to improve access to main room
d) Restore full -length window designs and install glass doors to make building inviting
e) Subdivide meeting room in NE section of building
f) Upgrade all mechanical, electrical, plumbing, and technology
2. Main Library
2.1.1. All Grant-Funded Infrastructure Items (per grant application and approval from California State Library)
2.1.2. Non-Grant-Funded Items:
a) Additional security gates for additional entrances
b) Archival storage space
c) Art space-gallery space with lighting
Item 3C - Page 2
City Council Staff Report
February 21, 2023 – Page 3
Scope of Work and RFQ for Library Renovation
d) Art wall in exterior public patio space
e) Café
f) Carpet
g) Children’s patio
h) Exterior Paint
i) Fixtures (Service desks, counters, cabinetry, kiosks, display furniture, mobile shelving)
j) Flexible Office space-community organization outreach or services, nonprofit support offices
k) Friends Book Sale space
l) Infrastructure upgrades required for project but not allowed/included in grant
m) Interior Paint
n) Koi Pond replacement
o) Landscaping
p) LED Sign upgrade
q) Library Furniture
r) More storage
s) New 350-seat event center -- an addition or annex adjacent to the existing building
t) Outdoor lighting on building
u) Outdoor use spaces -- public patios with seating
v) Parking Lot Expansion
w) Perimeter sidewalk lighting upgrades
x) Private meeting/study rooms
y) Scalable Classroom/maker space/meeting rooms
z) Steel book shelving and end panels
aa) Technology-cabling upgrades, computers, AV, PA system, screens, sound
bb) Window coverings for climate and light control
cc) Future proof electrical and plumbing for future expansions (NOTE:
added at the 2-1-23 meeting)
STAFF ANALYSIS:
This Scope of Work for the RFQ process will give potential architects and designers an idea of the size of th e potential project to determine if they are qualified to complete the task. Once a firm is selected, they will be tasked to determine cost estimates for items in the project ( grant funded and non -grant funded library project(s) and the JC Frey building). City Council can then decide what items from the additional scope, if any, to include in the project, or what to delay to a Phase Two. Additionally, cost estimates will assist the nonprofit organization, Palm Springs Public Library Foundation, in their capital campaign fundraising efforts.
It is suggested by Staff to include the Measure J funded work on the adjacent JC Frey Building in the same construction project scope of work, RFQ and future bid processes.
Item 3C - Page 3
City Council Staff Report
February 21, 2023 – Page 4
Scope of Work and RFQ for Library Renovation
The same library -focused architect/designer can do the work on both buildings located on the same site at Sunrise Park.
Staff recommends Council review and approve of the Scope of Work for inclusion in the RFQ and authorization to begin the Request for Qualifications process for the projects.
ENVIRONMENTAL ASSESSMENT:
In accordance with the California Environmental Quality Act (“CEQA”) Guidelines Section 15301 “Existing Facilities”, CEQA Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. It has not yet been determined if there will be an expansion of the building, therefore, Staff cannot yet determine if this RFQ becomes part of a project under CEQA.
ALIGNMENT WITH STRATEGIC PLANNING
:
This item aligns with City Council Priority 3 A, Improve City Facilities , and will assist in implementing the strategic planning task to Prioritize Deferred Maintenance.
FISCAL IMPACT
:
There are no associated extra costs with issuing a Request for Qualifications. The additional unfunded Scope of Work will add to design and construction costs.
REVIEWED BY:
Department Director: Jeannie Kays
Procurement & Contracting Manager: Kim Baker
Interim City Manager: Teresa Gallavan
ATTACHMENTS:
A. Library Infrastructure Grant Award Letter
B. City Council Resolution 25056
C. Building Forward Unallowable Items List
D. 12.22 Library Board Item 7C Infrastructure Renovation Priorities E. Library Board of Trustees Minutes, December 7, 2022
F. Library Board of Trustees Minutes, January 11, 2023
G. 2.23 Library Board Item 7B Renovation Scope of Work
H. Library Board of Trustees DRAFT Minutes, February 1, 2023 Item 3C - Page 4
ATTACHMENT A
Item 3C - Page 5
Library – Courts Building 916-323-9759
P.O. Box 942837 [email protected]
Sacramento, CA 94237-0001 www.library.ca.gov
September 12, 2022
Justin Clifton
City Manager
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Re: Building Forward Grant Program
Jurisdiction: PALM SPRINGS PUBLIC LIBRARY
Library: Palm Springs Public Library-Main
Project: Palm Springs Public Library Renovation
Dear Justin Clifton:
Congratulations! Following a rigorous review process, the California State Library is pleased to notify you of our intent to award a Building Forward grant for the project submitted for Palm Springs Public Library-Main.
Your grant award will be: $6,569,942
This award is intended to fund the following project outputs and related activities listed in your Supplementary Budget in accordance with allowable costs per the Grant Guidelines:
Furnish and Install Fire Sprinkler System
Fire Alarm System Control Panel
Emergency Egress Hardware
Emergency Egress Light, Power Systems
Ceiling Finishes (for new sprinkler system)
Air Filtration System
Security System - CCTV and Alarm System
Emergency Backup Generator
Skylights - Railings & Fall Protection Anchor Points
HVAC Replacement
HVAC Terminal and Package Units
Electrical Service
Seismic Retrofit
RI CALIFORNIA maa STATE LIBRARY
Item 3C - Page 6
Building Forward Grant Program
Library – Courts Building 916-323-9759
P.O. Box 942837 [email protected]
Sacramento, CA 94237-0001 www.library.ca.gov
Roof Replacement
Replace Carpet and/or Floors
Window replacements
Replace water lines - includes plumbing
Painting (preventative maintenance)
Replace Signage, ADA tactile, larger fonts for visually impaired Replace non-emergency lighting
Replace interior doors and locks
Inclusive Access
Based on your Award amount and your Local Income Per Capita (LIPC) level, your organization is required to provide a matching amount of $6,569,942 to support this project. Please note: Match funds must be expended during the grant period and at the same rate as state grant funds. Neither grant funds nor match funds may be spent on unallowable costs, which includes work done outside of the grant period.
At this time, please acknowledge receipt of this Intent to Award as soon as possible, and no later than Friday, September 23, by email to [email protected].
Your official Award Packet will be issued in the coming weeks after we have received your acknowledgement of this Intent to Award correspondence. The Packet will include the Award Letter confirming the award amount, project period, and required match amount (if applicable), as well as the Grant Agreement, a list of unallowable costs, and templates and guidance for submitting the following items, which are required for us to process your first payment:
• Confirmed Project Budget
• Final Project Implementation Plan
• Certification of Compliance
• Letter Certifying Availability of Match Funds (if applicable) • Resolution Authorizing Acceptance of the Grant
• Signed Grant Agreement
• Completed Fiscal Claim Form for the first award payment
Please note: No payment will be made until the above items, free from errors, have been received by the State Library. Awardees may typically expect payment to be issued within 45 days from the date a grant payment request is properly submitted and approved by the Fiscal Analyst.
Item 3C - Page 7
Building Forward Grant Program
Library – Courts Building 916-323-9759
P.O. Box 942837 [email protected]
Sacramento, CA 94237-0001 www.library.ca.gov
Hard copies of this correspondence will not follow. Please keep this Intent to Award correspondence as part of your official grant files. If you have any questions, please contact the Building Forward Team at [email protected].
The State Library looks forward to working to help you complete this project.
Respectfully,
Rebecca L. Wendt
California Deputy State Librarian
cc: Annly Roman
Reed Strege
Item 3C - Page 8
I -I
0 RESOLUTION NO. 25056
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS, CALIFORNIA, AUTHORIZING THE
GRANT APPLICATION, ACCEPTANCE, AND EXECUTION
OF THE GRANT FUNDS FROM THE STATE OF
CALIFORNIA BUDGET ACT OF 2021 (SB 129)
WHEREAS, the Legislature and Governor of the State of California have provided funds for the program shown above; and
WHEREAS, the California State Library has been delegated the responsibility for the administration of this grant program, establishing necessary procedures; and WHEREAS, said procedures established by the California State Library require a resolution certifying the approval by the potential grantee's governing board either before submission of said application(s) to the State or prior to execution of the grant agreement; and
WHEREAS, the City Council of the City of Palm Springs, California will enter into an agreement with the State of California to carry out the project; and WHEREAS, the City Council of the City of Palm Springs, California proposes to implement Palm Springs Public Library Renovation; and
WHEREAS, the City Council of t~e City of Palm Springs, California has the legal authority and is authorized to enter into a funding agreement with the State of California; and
WHEREAS, the City Council of the City of Palm Springs, California applied for grant funding from the California State Library for the Palm Springs Public Library Renovation; and
THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, WITH ACKNOWLEDGEMENT OF THE PALM SPRINGS PUBLIC LIBRARY, DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That pursuant and subject to all of the terms and provisions of the California Budget Act of 2021, the City Council of the City of Palm Springs, California, City Manager, or designee is hereby authorized and directed to prepare and file an application for funding with the California State Library and take such other actions necessary or appropriate to obtain grant funding.
SECTION 2. The City Council of the City of Palm Springs, California, City Manager, or designee is hereby authorized and directed to execute the funding agreement with the California State Library and any amendments thereto.
Item 3C - Page 9
Resolution No. 25056
SECTION 3. The City Council of the City of Palm Springs, California, City Manager, or designee is hereby authorized and directed to submit any required [lj documents, funding requests, and reports required to obtain grant funding.
SECTION 4. Certifies that the project will comply with any laws and regulations including, but not limited to, the California Environmental Quality Act (CEQA), legal requirements for building codes, health and safety codes, the California Labor Code, disabled access laws, and, that prior to commencement of the project, all applicable permits will have been obtained; and,
ADOPTED THIS 29TH DAY OF SEPTEMBER, 2022.
ATTEST:
B&a:~~
CITY CLERK
TERESA GALLAVAN
INTERIM CITY MANAGER
D
D
Item 3C - Page 10
[
D
D
Resolution No. 25056
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 25056 is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on September 29, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Councilmembers Kors, Woods, Mayor Pro Tern Garner and Mayor Middleton None
Council Member Holstege
None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this / 3 day of Oc;tu b:tW" , Jo ;J-J.... &~~.Cit
City of Palm Springs, California
Item 3C - Page 11
ATTACHMENT B
Item 3C - Page 12
Building Forward Grant Program
Unallowable Costs: Round 1
Updated 10/03/2022
This document outlines costs that are not allowable under the Building Forward Grant Program.
No grant funds or required local matching funds may be spent on unallowable costs.
Unallowable Costs include, but are not limited to:
• Bidding/advertising
• Book drops if not directly attached or built into the library building • Book lockers
• Community engagement, planning meetings, or workshops • Costs incurred outside of the grant period
• Entertainment or meals
• Escalation in addition to the project contingency
• Establishment of a reserve fund
• Exterior elements not attached to building, including but not limited to:
o Consultants or contractors engaged specifically for exterior elements/grounds (e.g. landscape designers, landscapers, planners), unless the work is directly associated with a funded project output and approved by the State Library o Electric vehicle charging stations
o Fences or Gates, installation and/or repair, unless directly attached to building, addressing an immediate life safety issue, and approved by the State Library o Fountains or other water features
o Landscaping
o Outdoor areas and access to these areas, including program space, courtyards, patios, benches/furniture, sitting areas, shade structures, and pergolas o Hardscape, outdoor walkways/paths of travel - including curbs, sidewalks, and walkways o Parking lots – creation, maintenance, reconfiguration, repair, sealing, resurfacing, and/or restriping
o Security cameras and/or lighting not directly attached to building o Shade structures
o Sprinklers or sprinkler repair
• Federal or state taxes
• Furniture (including accessible furniture) and furnishings I
_RI. _CALIFORNIA
._. STATE LIBRARY
I
Item 3C - Page 13
• General costs directly related to unallowable project components (or portion thereof), including, but not limited to: planning, construction/project management, consultant fees, design, architecture and engineering services, permits and fees, other pre-construction costs • Grant writing, fundraising, or lobbying
• Improvements to facilities that do not qualify as public library outlets • Indirect costs
• Moving or storage costs
• Open+
• Operation and ongoing maintenance – including extended warranties • Playgrounds and play structures (internal or external) • Programming
• Public art
• Real estate – purchase of land, structures, and any related fees • Removal/disposal of functional items
• Spaces not specifically for library use, such as general municipal services • Tangible property to support program operations and service delivery, such as tables, chairs, shelves, computers, servers, books, AV equipment/systems, televisions, vehicles, automatic book sorting systems, and self-check machines
Any expenditure not part of the approved grant budget is also considered unallowable. Any project activity not associated with an approved output is not allowable. Any modifications to the project budget must be reviewed and approved by the State Library.
If a grantee is unsure whether a cost is allowable or unallowable, they should contact the State Library before committing any funds and/or starting work.
Questions should be emailed to [email protected].
Item 3C - Page 14
ATTACHMENT C
Item 3C - Page 15
Library Infrastructure Renovation:
Grant Funded and Non-Grant Funded
Tasks
Item 7C
December 7, 2022
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 16
Grant Funded/Required Tasks
• Furnish and Install Fire Sprinkler System
• Fire Alarm System Control Panel
• Emergency Egress Hardware
• Emergency Egress Light, Power Systems
• Ceiling Finishes (for new sprinkler system)
• Air Filtration System
• Security System - CCT V and Alarm System
• Emergency Backup Generator
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 17
Grant Funded/Required Tasks
• Skylights - R ailings & Fall Protection Anchor Points • HVAC Replacement
• HVAC Terminal and Package Units
• Electrical Service
• Seismic Retrofit
• Roof Replacement
• Replace Carpet and/or Floors
• Window replacements
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 18
Grant Funded/Required Tasks
• Replace water lines - inc ludes plumbing
• Painting (preventative maintenance)
• Replace Signage, ADA tactile, larger fonts for visually i
mpaired
• Replace non-e mergency lighting
• Replace interior doors and locks
• Inclusive Access
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 19
Non-Grant Funded Recommendations for
Project: Phase One
• Furniture
• Fixtures (counters, cabinetry, steel shelving, end panels) • Equipment (computers and other technology)
• Exterior Painting
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 20
Non-Grant Funded Recommendations for
Project: Phase One
• Create small meeting rooms
• Extra costs associated with domino effect of moving
res
trooms and possibly other rooms
• Community Room to existing Children’s Room
• Children’s Room to existing Computer Room
• Relocating whatever is in new restroom location
(
All to be determined by Designer/Architect)
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 21
Future Phase Ideas
• Landscaping upgrades
• Parking lot expansion
• Community Room new exterior event patio
• Building Addition-au ditorium, community offices, archival space, additional meeting rooms or classrooms
DEPARTMENT OF LIBRARY
SERVICES
Item 3C - Page 22
ATTACHMENT D
Item 3C - Page 23
ATTACHMENT E
Item 3C - Page 24
Board of Library Trustees Minutes: December 7, 2022 1
PALM SPRINGS PUBLIC LIBRARY
BOARD OF LIBRARY TRUSTEES
MINUTES
Palm Springs Public Library December 7, 2022 Teleconference via Zoom
1. CALL TO ORDER
Chair Borba called the meeting to order at 5:30 p.m.
ROLL CALL PRESENT
Craig Borba Yes
Juanita Garner Yes
Al Jones Yes
Ed McBride Yes
David Norgard Yes
STAFF PRESENT: Jeannie Kays, Director of Library Services.
CITY STAFF PRESENT: Lisa Brock, Library Operations and Collection Manager , Kylee Otto, City Attorney.
PUBLIC PRESENT: Robert Engel, Michael Hirschbein, Nancy Morrison, David Sidley, Bill Wiley.
2. ACCEPTANCE OF THE AGENDA:
MOTION: (Norgard/Garner, 5-0) To accept the agenda.
3. PUBLIC COMMENTS: None.
4. CONSENT AGENDA
MOTION: (Jones/McBride, 5-0) To approve the consent agenda.
4. A. Meeting Minutes of October 19, 2022.
4. B. Library Statistics
4. C. Donation Report
5. ADMINISTRATIVE REPORTS
5. A. Friends of the Palm Springs Library
Nanci Morrison gave the report. The Friends raised $2500 at their Holiday Bazaar.
5. B. Palm Springs Public Library Foundation
David Sidley gave the report. The Foundation had their Pride on the Page book festival at Welwood Library. They sent out their yearend giving letter and donations are coming in.
5. C. Library Staff
Pride on the Page Book Festival: November 4-5. Festival and special event with Sharon Gless and Peter Paige were great events and well-attended.
Item 3C - Page 25
Board of Library Trustees Minutes: December 7, 2022 2 Santa: Visiting library December 7, 2022. Fun event every year.
Toy Drive: Happening now benefitting James O. Jessie Desert Highland Unity Center and Leisure Center Breakfast with Santa. December 15 is the last day to donate.
California Library Connect Grant: Awarded $99,581.24 today for technology hardware funding.
6. TREASURERS REPORT
Treasurer Jones gave the report. The trust fund balance is $1,781,310.91. The City lost money in their investments so $36,721.22 was deducted from the trust fund.
MOTION: (Jones/Garner, 5-0) To accept the report.
7. DISCUSSION/ACTION ITEMS
7. A. Discussion of Memorandum of Understanding between Trustees and Foundation
Kylee Otto with the City Attorney’s office went over the draft Memorandum of Understanding that was included in the Board packet. After the Library Board gives input on the draft it will be taken to the Foundation for their input. The MOU was left broad in certain areas to give flexibility. Trustee Norgard asked if intended outcomes or result should be included in Article 2, section d., part iii.
MOTION: (McBride/Garner, 5-0) To submit the document to the Foundation for review and input.
Chair Borba asked Director Kays to set up a meeting between the Board, the Foundation, and the Friends to discuss how they will handle donations with the renovation.
7. B. DISCUSS JC FREY BUILDING RENOVATION AND TIMELINE
Director Kays gave the report. The question about the JC Frey is do we try to get it done quickly to do we hold off and add that money to the Library Infrastructure Renovation. Chair Borba said it would be convenient to have the Frey building done so the temporary Library can open there.
Another suggestion was to bid the two buildings together, so they are both renovated at the same time. Trustee McBride asked if the City has the capacity to do both at the same time. Trustee Norgard asked if Director Kays feels the Frey building is the appropriate temporary branch. Director Kays said it’s one of many options that could work; the location of the temporary branch is not critical at this time the construction and money is more important. Trustee McBride said for him the priority is uninterrupted service to the community. He thinks we should postpone the JC Frey building and put that money towards the main Library renovation. Trustee Garner and Norgard agree we should focus on the main Library. Chair Borba agrees the main Library is the priority, but he is worried if we postpone the Frey building it won’t get done. Chair Borba suggested meeting with the engineering department to get a timeline for the Frey building. Treasurer Jones asked what the timeline for the main Library is. Trustee Norgard said the way he understands it is it’s not really a matter of timing but more that we need that money for the main Library. Director Kays said she can ask for a meeting but reiterated that the engineers are waiting on recommendations from the Library Board to proceed. Treasurer Jones said he does not understand where we are in the project and what the timeline is. Director Kays said that some of that falls under item 7. C. but the main thing needed now is recommendations from the Library Board. Treasurer Jones asked if the Board would need approval to move the money. Director Kays said the Board would make the recommendation and Measure J or City Council would have to approve it.
7. C. DISCUSS LIBRARY INFRASTRUCTURE RENOVATION – RECOMMEND PRIORITIES
Director Kays gave the report. The infrastructure grant is for $6,569,942.00 with matching funds from the City. The matching funds are budgeted in the five- year capital improvement plan with Measure J. The grant only covers certain tasks; when doing the construction there will be other Item 3C - Page 26
Board of Library Trustees Minutes: December 7, 2022 3 things that need to be done outside of the grant funds. The City or the non-profits will need to come up with extra money to cover. The Library Board needs to decide how much extra they are going to be able to afford to put into the scope of work. Treasurer Jones asked if we had a dollar amount for these extra projects. The City wants to know what the Library Board expects Phase One to have in it. Phase One would be done concurrently with the grant projects. Director Kays went over recommendations for projects that should be done in Phase One. They include Furniture, Fixtures (counters, cabinetry, steel shelving, end panels), Equipment (computers and other technology), Exterior Painting, Small Meeting Rooms, and extra costs associated with domino effect of m oving restrooms and possibly other rooms. Trustee McBride said the Library Board cannot sit back and allow the City to expect the fundraising arms to provide what the City should be providing to the Library and to the community. He asked what happened to the money that was set aside for the Library before the grant came along. Chair Borba said the future phase ideas should be included in Phase One.
MOTION: (McBride/Norgard, 5-0) To recommend that the City include in the scope of work all the non-grant funded recommendations listed as Phase One as well as the four bullet pointed items listed as future phase ideas.
Moved back to 7. B. at this time.
MOTION: (McBride/Jones, 5-0) To recommend that the City moves forward with the plan to renovate the JC Frey building according to budget and present back to the Library Board with a plan and a confirmed budget. It should not impede on the main Library renovation.
8. TRUSTEE/STAFF COMMENTS/FUTURE AGENDA ITEMS
If Chair Borba and Trustee Norgard are able to meet with the Engineering Department, they will report on the meeting at the January meeting. The Foundation reporting on their changes to the Memorandum of Understanding. Michael Hirschbein suggested the Library Board ask the City to come up with a critical path with specific dates and ask them to report to the Library Board on a monthly basis with updates.
The next Board meeting is scheduled for January 4, 2023.
9. ADJOURNMENT
The December meeting adjourned at 7:23 p.m.
RESPECTFULLY SUBMITTED,
Jeannie Kays
Director of Library Services
Item 3C - Page 27
ATTACHMENT F
Item 3C - Page 28
Board of Library Trustees Minutes: January 11, 2023 1
PALM SPRINGS PUBLIC LIBRARY
BOARD OF LIBRARY TRUSTEES
MINUTES
Palm Springs Public Library January 11, 2023 Teleconference via Zoom
1. CALL TO ORDER
Chair Borba called the meeting to order at 5:36 p.m.
ROLL CALL PRESENT
Craig Borba Yes
Juanita Garner Yes
Al Jones Yes
Ed McBride Yes
David Norgard Yes
STAFF PRESENT: Jeannie Kays, Director of Library Services.
CITY STAFF PRESENT: Lisa Brock, Library Operations and Collection Manager.
PUBLIC PRESENT: Robert Engel, Nanci Morrison, David Sidley, Bill Wiley.
2. ACCEPTANCE OF THE AGENDA:
MOTION: (Norgard/Garner, 5-0) To accept the agenda.
3. PUBLIC COMMENTS: None.
4. CONSENT AGENDA
MOTION: (McBride/Jones, 5-0) To approve the consent agenda.
4. A. Meeting Minutes of December 7, 2022.
4. B. Library Statistics
4. C. Donation Report
5. ADMINISTRATIVE REPORTS
5. A. Friends of the Palm Springs Library
Director Kays gave the report. The Friends will have a house tour for Modernism Week. The tour will be at a Historic Cavanagh Adobe House in Indian Wells on February 24 th. They are having a book sale at
the Frey building on January 21st.
5. B. Palm Springs Public Library Foundation
David Sidley gave the report. The Foundation received $14,473 from their year-end letter campaign.
They are interviewing six new board members. Working on a new fundraiser that will be April 1st that will feature two authors.
5. C. Library Staff
Item 3C - Page 29
Board of Library Trustees Minutes: January 11, 2023 2 Palm Springs Speaks: Save the Date-Friday, March 31. Will be announcing the speaker very soon and tickets will go on sale soon.
Martin Luther King, Jr. Day: Monday, January 16. Main Library Closed. Welwood Murray Memorial Library will be open.
Virtual Author Event: January 17 at 11:00 am. Decluttering to Start Your New Year: Author Talk with Dana K. White.
Mah Jong Classes: Very popular. January 25 at 6:00 pm.
6. TREASURERS REPORT
Treasurer Jones gave the report. The trust fund balance is $1,778,902.99.
MOTION: (Jones/Garner, 5-0) To accept the report.
7. DISCUSSION/ACTION ITEMS
7. A. DISCUSSION OF MEMORANDUM OF UNDERSTANDING BETWEEN TRUSTEES AND
FOUNDATION
Bill Wiley gave the report. In section I. b. ii. the Foundation asked who the point person from the City would be. Director Kays said she is the staff liaison with the City. Chair Borba asked to have Library Director added in place of City Staff. In section II. a. iv. the Foundation requests to review any promotional materials before they go out to the public. The MOU mentions dissolution in several places; in the Foundations bylaws it says that if they dissolve any money will go to the Palm Springs Library. Director Kays will have the attorney check for redundancies. Section II. b. iii. discusses required reports. The Foundation feels that it is too much, asks for too much detail, and if given to the City becomes public and they are not a public entity. David Sidley suggested that it be changed to only refer to funds borrowed or gifted from the Library Board. Trustee McBride does not agree he feels the foundation should be transparent. Chair Borba said if the Foundation has an event he wants to know how muc h they spent and how much is made. The Trustees agreed they do not want individual names. Trustee McBride suggested the Foundation put in what they want and see what the attorneys say. He suggested changing it to the Foundation shall provide biannual reports to be defined by the Library Director and the executive board of the Library Foundation.
Trustee Norgard said the intent of this section is to understand how effective and efficient the fundraising is going. The Foundation would like II. c. ii. removed. When discussing naming rights Director Kays said all decisions would have to be run through her and suggested adding a line saying anything up to $25,000 be approved by the Library Director. David Sidley said he thinks the Foundation should have exclusive naming rights; to avoid confusion or conflict one entity should have those rights. Chair Borba said the Friends should be included in that decision. Trustee McBride said in his experience Foundations have had exclusive naming rights. Trustee Garner agrees there needs to be one organization that handles naming rights. Chair Borba suggested a meeting between the Foundation, the Friends, and the Library Board to discuss naming rights. The Foundation requested the current insurance coverage amounts required by the City Manager. They requested the last line in VIII. a. be looked at. In Exhibit A they suggested striking Less than $5,000 and then having further discussion. Discussion on this topic will continue at the next Board meeting.
7. B. DISCUSS LIBRARY INFRASTRUCTURE RENOVATION-REVIEW TIMELINE
Director Kays went over the timeline that is being turned into the State Library. Treasurer Jones asked what the Board can do to remain a priority to the City and asked to discuss this further at the next meeting. Director Kays will let the Library Board know when the RFP goes out. The plan is to ask for prices for the infrastructure and the additions so we know the total cost and the City can decide if they want to fund it or if additional funding is needed.
Item 3C - Page 30
Board of Library Trustees Minutes: January 11, 2023 3 MOTION: (Norgard,McBride 5-0) The City focus on hiring the consultants and designers as soon as possible to keep this project on track.
8. TRUSTEE/STAFF COMMENTS/FUTURE AGENDA ITEMS
Director Kays needs volunteers for a 2023- 2024 fiscal year budget ad hoc subcommittee. Treasurer Jones and Trustee Garner volunteered. Director Kays will schedule a meeting.
9. ADJOURNMENT
The January meeting adjourned at 7:17 p.m.
RESPECTFULLY SUBMITTED,
Jeannie Kays
Director of Library Services
Item 3C - Page 31
ATTACHMENT G
Item 3C - Page 32
MEMORANDUM
DATE:
February 1, 2023
SUBJECT: LIBRARY RENOVATION SCOPE OF WORK
TO: Library Board of Trustees
FROM: Jeannie Kays, Director of Library Services
To creat
e a Request for Qualifications (RFQ), City Staff is asking for input and confirmation from the Library Board of Trustees to ensure we include the full scope of this project being requested. Listed is the suggested scope of the project based on previous meeting discussions. This agenda item is to confirm the Trustees’ wishes and ensure that the full list of Trustee-requested items is included in the RFQ request that will be submitted to City Council for approval.
1. JC Frey Building rehabilitation and renovation
a) Correct any building deficiencies
b) Create single-use gender neutral restroom(s)
c) Move equipment closet inside front door to improve access to main room d) Restore full-length window designs and install glass doors to make building inviting e) Subdivide meeting room in NE section of building
f) Upgrade all mechanical, electrical, plumbing, and technology
2. Main Library
2.1.1. All Grant-Funded Infrastructure Items (per grant application and approval from California State Library)
2.1.2. Non-Grant-Funded Items:
a) Additional security gates for additional entrances
b) Archival storage space
c) Ar t space-gallery space with lighting
d) Art wall in exterior public patio space
e) Café
f) Carpet
g) Children’s patio
h) Exterior Paint
i) Fixtures (Service desks, counters, cabinetry, kiosks, display furniture , mobile shelving)
j) Flexible Office space-community organization outreach or services, nonprofit support offices
k) Friends Book Sale space
l) Infrastructure upgrades required for project but not allowed/included in grant m) Interior Paint
n) Koi Pond replacement
o) Landscaping
p) LE D Sign upgrade
2.1.23 Library Board of Trustees, Item 7B
Item 3C - Page 33
Library Board Staff Report
February 1, 2023
Memorandum—Page 2
q) Library Furniture
r) More storage
s) New 350-seat event center -an addition or annex adjacent to the existing building
t) Outdoor lighting on building
u) Outdoor use spaces-public patios with seating
v) Parking Lot Expansion
w) P erimeter sidewalk lighting upgrades
x) Private meeting/study rooms
y) Scalable Classroom/maker space/meeting rooms
z) Steel book shelving and end panels
aa) Technology-cabling upgrades, computers, AV, PA system, screens, sound bb) Window coverings for climate and light control
2.1.22 Library Board of Trustees, Item 7B
Item 3C - Page 34
ATTACHMENT H
Item 3C - Page 35
DRAFT
Board of Library Trustees Minutes: February 1, 2023 1
PALM SPRINGS PUBLIC LIBRARY
BOARD OF LIBRARY TRUSTEES
MINUTES
Palm Springs Public Library February 1, 2023 Teleconference via Zoom
1. CALL TO ORDER
Chair Borba called the meeting to order at 5:30 p.m.
ROLL CALL PRESENT
Craig Borba Yes
Juanita Garner Yes
Al Jones Yes
Ed McBride Yes
David Norgard Yes
STAFF PRESENT: Jeannie Kays, Director of Library Services.
CITY STAFF PRESENT: Julie Warren, Library Services and Public Relations Manager.
PUBLIC PRESENT: Robert Engel, Nanci Morrison, Bill Wiley, Jackson Toone.
2. ACCEPTANCE OF THE AGENDA:
MOTION: (Jones/ Norgard, 5-0) To accept the agenda.
3. PUBLIC COMMENTS: None.
4. CONSENT AGENDA
MOTION: (McBride/Garner, 5-0) To approve the consent agenda.
4. A. Meeting Minutes of January 11, 2023.
4. B. Library Statistics
4. C. Donation Report
5. ADMINISTRATIVE REPORTS
5. A. Friends of the Palm Springs Library
Nanci Morrison gave the report. The Friends are hosting Al Franken for Palm Springs Speaks on March 31 at the Palm Springs High School Richards Center for the Arts. Tickets are on sale at www.palmspringsspeaks.org. The Friends will have a house tour for Modernism Week. The tour will be at the Historic Cavanagh Adobe House in Indian Wells on February 24 th. Tickets are available at
www.modernismweek.com.
5. B. Palm Springs Public Library Foundation
Bill Wylie gave the report. The Foundation is hosting a Brunch fundraiser that will be April 1 st featuring two authors.
5. C. Library Staff
Item 3C - Page 36
DRAFT
Board of Library Trustees Minutes: February 1, 2023 2 President’s Day: Monday, February 20. Main Library Closed. Welwood Murray Memorial Library will be open.
Mah Jong Open Play: Very popular. Wednesdays from 2-4 pm.
6. TREASURERS REPORT
Treasurer Jones gave the report. The trust fund balance is $1,778,652.99.
MOTION: (Norgard/Garner, 5-0) To accept the report.
7. DISCUSSION/ACTION ITEMS
7. A. 2023-24 LIBRARY BUDGET AND TRUST FUND BUDGET DISCUSSION AND APPROVAL OF PROPOSED FUNDS BY “2023-24 LIBRARY BUDGET AD HOC COMMITTEE” (JONES/GARNER)
Treasurer Jones and Vice Chair Garner presented their recommendations for the Library Trust Funds and reported Director Kays’ recommendations for the Library General Fund budget. The ad hoc committee recommended allocating $1,000,000 to the Library Renovation, $500,000 to the Library Foundation, $20,000 to the Trust Fund Books account with $10,000 of that specified for Nonfiction Books from the Kropitzer account, and putting the remaining cash balance in the Future Library Projects account. Chair Borba stated he was uncomfortable with allocating $500,000 to the Library Foundation. He recommended lowering the amount to $200,000 and allocate the remainder to the Renovation. Chair Borba’s recommendation failed to get a second.
MOTION: (Jones/Norgard 4-1) Accept budget as outlined in the February 1, 2023 memo based on ad hoc meeting Vice Chair Garner and Treasurer Jones had with Director Kays. (Chair Borba voted no)
7. B. LIBRARY INFRASTRUCTURE RENOVATION-DISCUSS AND APPROVE SCOPE OF
SERVICES TO BE LISTED IN REQUEST FOR QUALIFICATIONS
Director Kays went over the background of the project and scope of work discussed at the December 7, 2022 meeting that were included in the attached memo. The Trustees confirmed that the items listed in the Scope of Work Memorandum were as discussed with the omission of “future proof mechanical, electrical, and plumbing for possible expansion ,” which was discussed at the previous meeting.
MOTION: (Jones/Garner 5-0) To adopt list as written with the addition of “future proofing of mechanical, electrical, and plumbing for possible expansion” to the list.
8. TRUSTEE/STAFF COMMENTS/FUTURE AGENDA ITEMS
Discuss Memorandum of Understanding comments by Library Foundation.
9. ADJOURNMENT
The February meeting adjourned at 7:06 p.m.
RESPECTFULLY SUBMITTED,
Jeannie Kays
Director of Library Services
Item 3C - Page 37
CITY COUNCIL STAFF REPORT
02/21/2023
SUBJECT:
GENERAL FUND, CAPITAL, AND AIRPORT MID-YEAR FISCAL YEAR 2022-23
BUDGET UPDATE
RECOMMENDATION:
Receive and file.
Attachments
Item 3D
CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 21, 2023 BUSINESS & LEGISLATIVE
SUBJECT: GENERAL FUND, CAPITAL, AND AIRPORT MID-YEAR FISCAL YEAR 2022-23 BUDGET UPDATE
FROM: Teresa Gallavan, Interim City Manager
BY: Department of Finance and Treasury
Department of Engineering
Department of Aviation
SUMMARY
This item will provide City Council an update on General Fund revenues and expenses, Capital, and Airport Fund revenue, expenses , and capital for the first half of the Fiscal Year 2022-23.
RECOMMENDATION
Receive and file.
STAFF ANALYSIS:
GENERAL FUND:
General Fund Revenue Highlights
The General Fund ended the first two quarters of the fiscal year with total revenue at $65.8 million. This is down 5% from the first two quarters of fiscal year 2022 largely due to the receipt of ARPA funds in the first quarter of FY22. A summary of mid-year revenue for FY23 versus FY 22 is shown in Table 1 on the following page. Mid-Year highlights are presented below:
• Property tax is up 10% over prior year. The City will receive two more distributions of property tax in the 3
rd and 4th quarter of the fiscal year. Property tax in FY22 was $28.9 million and FY23 is on track to exceed that amount. • Sales tax was strong in FY22 and that is continuing into FY23. At mid- year, sales tax is $9.5 million, 7% above FY22 mid-year totals.
Item 3D - Page 1
City Council Staff Report
February 21, 2023 -- Page 2
Mid-Year FY 2022-23 Budget Update
• Transient Occupancy Tax (TOT) is down from FY22, approximately 8% from $17.3 million in FY22 to $15.9 million in FY23. Despite the decline it appears that we are on track to meet budget.
• Utility Users Tax (UUT) continues to improve over prior year. UUT ended FY21 at approximately $7 million. In FY22, UUT ended the year just over $15 million, and FY23 is on track to exceed that amount. At mid- year, UUT is up over 40% from prior year at $6.6 million for mid- year FY23 compared to $4.7 million at mid- year FY22.
TABLE 1
General Fund Expense Highlights
The General Fund ended the first two quarters of the fiscal year with total expenses of $80.9 million. This is up approximately 41%, or $23.6 million, from fiscal year 2022. A summary of mid-year expenses for FY23 versus FY 22 is shown in Table 1 above. Mid- Year highlights are presented below:
• All the departments have increased expenses over prior year due to the following:
- Salary and Benefit expenses are up approximately 17% in FY23 largely due to the ramp-up of staff in FY22 coming out of the COVID-19 pandemic. That ramp- up of staff is continuing in FY23. Salary and benefits at mid- year FY22 were approximately $33.8 million compared to FY23 at $39.4 million, accounting for $5.6 million of the total expense variance at mid-year. - Each department records a quarterly administrative charge to fund maintenance expenses for vehicles and City facilities. These maintenance 2022 2023
2023 vs
2022
Q1 Q2 Q1 Q2 Mid-Year Total Mid-Year Total
Total Revenue 30,762,935$ 38,388,416$ 25,131,643$ 40,660,574$ 69,151,352$ 65,792,217$ -5% Property Tax - 9,346,248 43,977 10,279,618 9,346,248 10,323,595 10% Sales and Use Taxes 2,100,846 6,790,136 2,163,068 7,330,660 8,890,982 9,493,728 7% Cannabis Tax 807,226 1,141,708 491,870 966,589 1,948,934 1,458,459 -25% Transient Occupancy Tax 5,702,387 11,619,052 4,910,978 10,991,846 17,321,439 15,902,824 -8% Utility Users Tax 2,099,492 2,558,462 2,292,295 4,293,034 4,657,954 6,585,329 41% Other Taxes 271,727 921,567 237,516 838,640 1,193,295 1,076,156 -10% Permit and Fees 3,399,912 3,691,444 3,763,229 4,104,094 7,091,357 7,867,323 11% Miscellanious Revenue 1,431,323 2,143,788 755,140 1,380,094 3,575,111 2,135,234 -40% Grant Revenue 14,950,021 176,010 10,223,571 225,999 15,126,031 10,449,570 -31% Transfer In - - 250,000 250,000 - 500,000 Total Expense 25,568,351$ 31,677,963$ 34,057,808$ 46,851,895$ 57,246,313$ 80,909,703$ 41% General Government 5,751,168 8,896,750 6,868,354 15,263,024 14,647,918 22,131,378 51% Police 8,052,749 9,327,255 9,708,637 11,026,351 17,380,005 20,734,988 19% Fire 4,652,352 5,276,250 5,589,600 6,309,503 9,928,602 11,899,103 20% Cultural and Convention Center 1,338,591 1,843,700 1,168,852 2,687,119 3,182,291 3,855,971 21% Parks and Recreation 1,172,716 1,194,545 1,340,342 1,595,831 2,367,261 2,936,173 24% Public Works 1,375,165 1,847,872 1,982,955 2,530,156 3,223,037 4,513,111 40% Library 701,668 767,650 683,118 723,963 1,469,318 1,407,081 -4% Transfer Out 2,523,941 2,523,941 6,715,950 6,715,950 5,047,883 13,431, 899 166% Surplus/(Deficit) 5,194,585$ 6,710,453$ (8,926,165)$ (6,191,321)$ 11,905,038$ (15,117,486)$ 2022 2023
Item 3D - Page 2
----
-- -- -- -- --
City Council Staff Report
February 21, 2023 -- Page 3
Mid-Year FY 2022-23 Budget Update
costs increased in total from $9.1 million in FY22 to $14.8 million in FY23. The increase is largely due to maintenance that was cut during the COVID -19 pandemic but restored in the FY23 budget. At mid- year, this increase in administrative charges accounted for approximately $3 million of the total expense variance at mid-year.
• In the FY23 budget, the City Council approved additional amounts to be transferred out of the General Fund to the Fleet Vehicle and Facility Maintenance funds. In addition, an IT fund was created to fund internal purchases for miscellaneous IT equipment for the City. In total, for FY22, these transfers were approximately $10 million; in FY23, these transfers will total over $26 million, an increase of $16 million. This increase accounted for just over $8 million of the total expense variance at mid-year.
• The General Government line item in Table 1 below is reflective of the $2.8 million capital contribution to Desert Aids Project (DAP) approved by the City Council in the FY23 budget and is part of the total expense variance at mid-year.
General Fund Budgetary Highlights
Both the General Fund revenue and expense totals at mid-year are 35% of the total FY23 budget. The City records most of the revenue in the 4 th quarter of the fiscal year (April – June). At mid-year there are positive trends in all tax line items with most being more than FY22 numbers. TOT is down 8% at mid- year but is still on track to meet budget if the trend continues. TOT revenue in FY22 exceeded $54 million; a 10% decline in FY23 would result in revenue of approximately $49 million, exceeding the budgeted $48.4 million. These positive trends result in cautious optimism the City will meet its FY23 revenue budget given a continued strong tourism industry in the first half of 2023. A summary of mid -year revenue and expenses for FY23 is shown in Table 2 on the following page.
Item 3D - Page 3
City Council Staff Report
February 21, 2023 -- Page 4
Mid-Year FY 2022-23 Budget Update
TABLE 2
As a reminder, the City Council approved approximately $24 million in set asides in the FY23 budget, listed below:
• $10 million for Affordable Housing
• $4 million for Homelessness
• $4 million for Police
• $3 million for Parks and Recreation
• $2 million for Workforce Development
• $1 million for Climate programs
The amount of set asides that go unused in FY23 will be a benefit to the budget but will be re-budgeted in the FY24 budget and beyond until the funds have been expended.
CAPITAL UPDATE
There are nine (9) funds that make up the Capital Projects funding sources. Total tax and fee revenue in these funds is approximately $28 million. The City also receives 2023 2023
% of
Budget
Q1 Q2 Mid-Year Total Budget Achieved
Total Revenue 25,131,643$ 40,660,574$ 65,792,217$ 188,274,473$ 35% Property Tax 43,977 10,279,618 10,323,595 29,235,750 35% Sales and Use Taxes 2,163,068 7,330,660 9,493,728 30,717,096 31% Cannabis Tax 491,870 966,589 1,458,459 5,123,000 28% Transient Occupancy Tax 4,910,978 10,991,846 15,902,824 48,377,203 33% Utility Users Tax 2,292,295 4,293,034 6,585,329 11,500,000 57% Other Taxes 237,516 838,640 1,076,156 14,759,344 7% Permit and Fees 3,763,229 4,104,094 7,867,323 13,649,301 58% Miscellanious Revenue 755,140 1,380,094 2,135,234 2,356,254 91% Grant Revenue 10,223,571 225,999 10,449,570 31,556,525 33% Transfer In 250,000 250,000 500,000 1,000,000 50% Total Expense 34,057,808$ 46,851,895$ 80,909,703$ 232,172,414$ 35% General Government 6,868,354 15,263,024 22,131,378 96,595,884 23% Police 9,708,637 11,026,351 20,734,988 45,474,713 46% Fire 5,589,600 6,309,503 11,899,103 27,009,692 44% Cultural and Convention Center 1,168,852 2,687,119 3,855,971 10,454,448 37% Parks and Recreation 1,340,342 1,595,831 2,936,173 13,519,220 22% Public Works 1,982,955 2,530,156 4,513,111 6,254,659 72% Library 683,118 723,963 1,407,081 3,440,106 41% Transfer Out 6,715,950 6,715,950 13,431,899 26,863,798 50% Surplus/(Deficit) (8,926,165)$ (6,191,321)$ (15,117,486)$ (43,897,940)$ 34% 2023
Item 3D - Page 4
City Council Staff Report
February 21, 2023 -- Page 5
Mid-Year FY 2022-23 Budget Update
reimbursement revenue for major road and bridge projects from California Department of Transportation (Caltrans) and/or the Coachella Valley Association of Government (CVAG), which can be a major source of funding. The budget in 2023 for these reimbursements is $29.5 million. A description of each fund and major projects the fund supports are explained below.
Gas Tax Fund
This Special Revenue Fund accounts for revenue received from the state through the City’s gas tax allocations. These funds are restricted to road and street improvements.
A listing of all projects that have been approved and funded with the Gas tax can be seen in Attachment 1, along with project status, mid -year financial information, and 2023 budget. Below is a partial list of projects funded by the Gas Tax:
Project No. Project Gas Tax
Slurry Annual Slurry Seal $675 Thousand
Traffic Calming Traffic Calming $250 Thousand
Measure A Fund
“Measure A” was placed on the ballot in November 1988 and approved a County -wide ½¢ sales tax reserved for transportation projects for a period of 30 years. In November 2002 the Measure A Program was extended through 2039.These funds are restricted for street/road maintenance and Capital projects.
Revenue in this fund also comes from the Coachella Valley Association of Governments (CVAG) in the form of a reimbursement of 75% of the City’s share of a regional project.
A regional project is a project that CVAG has identified in their Transportation Project Prioritization Study (TPPS).
A listing of all projects that have been approved and funded by the Measure A Fund can be seen at Attachment 2, along with mid- year financial information and 2023 budget .
Below is a partial list of projects funded by Measure A:
Project No. Project Measure A
CP 01-11 Indian Canyon Bridge Replacement $1.0 Million CP 08-25 Ramon Road Bridge Widening $1.1 Million
CP 10-10 Vista Chino Bridge $2.5 Million
Slurry Annual Slurry Seal $675 Thousand
Traffic Calming Traffic Calming $250 Thousand
Drainage Fund
A drainage fee is collected as an impact fee on new development whenever vacant land Item 3D - Page 5
City Council Staff Report
February 21, 2023 -- Page 6
Mid-Year FY 2022-23 Budget Update
will be improved. New developments can potentially generate increased stormwater runoff to the City’s streets and increase the need for new storm drainage improvements.
The impact fee is applied to building permits and vary depending on the size of the property and its location in the City. These fees are collected and retained by the City for its use in constructing portions of the City’s Master Plan of Drainage and can also contribute to any flood control projects completed by the District within Palm Springs.
A listing of all projects that have been approved and funded by the Drainage fees can be seen at Attachment 3, along with mid-year financial information and 2023 budget. Below is a project funded by the Drainage Fund:
Project No. Project Drainage Fund
CP 19-15 Storm Drain Line 20 $1.2 Million
Community Development Block Grant Fund
This Special Revenue Fund accounts for revenue received from the U.S. Department of Housing and Urban Development through the Community Development Block Grant (CDBG) program. Annually, the City receives an allocation of CDBG funds that are allocated to this Special Revenue Fund, and with each Annual Action Plan approved by City Council the expenditures for programs, services and capital projects are appropriated and expended separately.
A listing of all projects that have been approved and funded by the CDBG Grants can be seen at Attachment 4, along with mid-year financial information and 2023 budget. Below is a project funded by CDBG:
Project No. Project CDBG Fund
CP 22-25 Demuth and Baristo Shade Structures $282 Thousand
SB1 – Road Maintenance Rehab Account (RMRA)
This Special Revenue Fund accounts for revenue received through the SB1 Road Maintenance and Rehabilitation Account (RMRA). The account is funded by the passing of the Road Repair and Accountability Act in 2017 which increased the state excise tax on gasoline. Through a statewide formula, the City receives an allocation of the tax that can only be used on street/road projects formally adopted by City Council and approved by the California Transportation Commission.
A listing of all projects that have been approved and funded by the RMRA gas tax can be seen at Attachment 5, along with mid-year financial information and 2023 budget. Below is a partial list of projects funded by the RMRA Gas Tax:
Item 3D - Page 6
City Council Staff Report
February 21, 2023 -- Page 7
Mid-Year FY 2022-23 Budget Update
Project No. Project RMRA Fund
CP 20-19 Rosa Parks Traffic Signal $674 Thousand
CP 20-33 San Raphael Traffic Signal $631 Thousand
Quimby Act Fund
This Special Revenue Fund accounts for revenue received from developer impact fees levied on new residential development. The payment of fee is in lieu of the construction of new park or recreational facilities as a condition of approval associated with residential development. All fees collected are restricted to be used for Parks and Recreation projects.
A listing of all projects that have been approved and funded by the Quimby fees can be seen at Attachment 6, along with mid-year financial information and 2023 budget. Below is a project funded by Quimby fees:
Project No. Project Quimby Act Fund CP 21-16 Demuth Dog Park $1.4 Million
Measure J Fund
Palm Springs voters supported and approved a ballot measure “Measure J” on the November 2011 municipal election that increased local sales tax by 1% for a term of 25 years effective April 1, 2012.
The sales tax is considered a general tax and can be used in the same manner sales tax is used in the General Fund, for any legitimate governmental purpose. The Measure J additional sales tax revenue is collected in the same manner as other sales and use taxes; however, in conformance with the adoption of Measure J the City accounts for, allocates, and audits the Measure J revenue separately from the General Fund.
The funds received through Measure J are overseen by a commission that meets once a month. The commission will take suggestions from residents on projects and annually will provide a list of recommended projects to the City Council for approval.
A listing of all projects that have been approved and funded by the Measure J sales tax can be seen at Attachment 7, along with mid-year financial information and 2023 budget.
Below is a partial list of projects funded by Measure J:
Project No. Project Measure J
CP 16-08 Main Library Renovation $4.1 Million
CP 18-06 Victoria and Ruth Hardy Park Restroom $1.2 Million CP 19-28 Recreational Field Lighting Upgrade $4.7 Million Paving Annual Paving Rehabilitation $6.0 Million
Item 3D - Page 7
City Council Staff Report
February 21, 2023 -- Page 8
Mid-Year FY 2022-23 Budget Update
Capital Projects Fund
This Capital Projects Fund accounts for revenue received from various sources. Primary funding sources include an annual transfer from the General Fund of $2 million and grants issued by the California Department of Transportation (Caltrans). The City receives
88.53% funding for road and bridge projects that are approved by Caltrans.
A listing of all projects that have been approved and funded by the Capital Projects Fund can be seen at Attachment 8, along with mid-year financial information and 2023 budget.
Below is a partial list of projects funded by Capital Projects Fund:
Project No. Project Capital Projects Fund CP 01-11 Indian Canyon Bridge Replacement $18.8 Million CP 08-25 Ramon Road Bridge Widening $29.0 Million
CP 10-10 Vista Chino Bridge $84.0 Million
Wastewater Treatment Fund
The City owns and operates a wastewater treatment plant (WWTP) and sewer collection system that is completely financed and funded separate and apart from the General Fund in an Enterprise Fund designated as the Wastewater Treatment Fund. The fund generates revenue through two primary sources: (1) sewer connection fees charged on building permits for new construction that includes plumbing fixtures; and (2) monthly sewer service fees (like any other monthly utility bill).
A listing of all projects that have been approved and funded with wastewater fees can be seen at Attachment 9, along with mid-year financial information and 2023 budget. Below is a partial list of projects funded by the Wastewater Treatment Fund:
Project No. Project Wastewater Fund CP 18-18 Bogert Sewer Lift Station $2.9 Million
CP 20-25 Digester No.2 and Gas Flare $18.2 Million
CP 21-06 Demo of Abandoned Headworks $1.8 Million
PALM SPRINGS INTERNATIONAL AIRPORT
The City owns and operates the Palm Springs International Airport (Airport). Unlike other regional airports that are owned by separate governmental agencies, the City is fully responsible for all revenues and expenses associated with the Airport. The Airport operates as a business and its revenues and expenses are appropriated in a separate Enterprise Fund called the General Airport Operations Fund, which consists of four separate funds: Customer Facility Charge, Passenger Facility Charge, General Airport Operations, and Airport Capital Projects.
Item 3D - Page 8
City Council Staff Report
February 21, 2023 -- Page 9
Mid-Year FY 2022-23 Budget Update
Customer Facility Charge Fund
The Customer Facility Charge revenue is collected by the car rental concessionaires and remitted to the Airport according to state law to support the future consolidated rental car facility project. Effective March 1, 2022, in accordance with the State of California as required in Section 50474, the collection methodology changed from $10.00 per rental car transaction to $9.00 per rental day (up to a maximum of five days). Customer Facility Charge Fund revenues and expenses are shown below in Table 3.
TABLE 3
There are currently no projects approved and funded by the Customer Facility Charge account.
Passenger Facility Charges Fund
The Passenger Facility Charge revenue is comprised of a $4.50 charge (net $4.39 to the Airport after deduction of $0.11 for the airline ‐processing fee) paid by each ticketed passenger that boards an airplane at the Airport. Certain types of passengers, including military, are excluded from paying the Passenger Facility Charge. In 2019, the City Council adopted an Ordinance authorizing the issuance of the 2019 Airport Passenger Facility Charge Revenue Bonds for the purpose of financing a portion of the design, acquisition, and construction of the Airport Terminal Improvements. As a result, Bonds in the amount of $22,270,000 were issued. Interest is payable semiannually on June 1, and December 1 of each year until maturity or earlier redemption. The principal balance outstanding and unamortized premium as of June 30, 2022, are $17,750,000 and $2,521,051. Passenger Facility Charge F und revenues and expenses are shown below in Table 4.
TABLE 4
CUSTOMER FACILITY 2022 2023 2023 % of Budget
CHARGE FUND Mid-Year M id-Year Variance Budget Achieved YTD Total Revenue 767,450$ 2,378,019$ 1,610,569$ 7,465,000$ 32% Interest Income 63,284 166,548 103,264 320,000 52% Unrealized Gain Or Loss 72,125 - (72,125) - Off-Airport Rental Car 632,041 2,211,471 1,579,430 7,145,000 31% Total Expense -$ -$ -$ 3,123,264$ 0% Airport Customer Facility - - - 3,123,264 0% Surplus/(Deficit) 767,450$ 2,378,019$ 1,610,569$ 4,341,736$ 55% PASSENGER FACILITY 2022 2023 2023 % of Budget
CHARGE FUND Mid-Year Mid-Year Variance Budget Achieved YTD Total Revenue 1,252,789$ 2,189,708$ 936,919$ 6,867,000$ 32% Interest Income 5,277 12,300 7,023 50,000 25% Interest Income-Fiscal Agent 1,039 77,864 76,825 - Unrealized Gain Or Loss 5,420 - (5,420) - Passenger Facility Chg 1,241,053 2,099,544 858,491 6,817,000 31% Total Expense 7,498,573$ 2,815,460$ (4,683,113)$ 2,521,000$ 112% Series 2019 Debt Service 484,420 443,750 (40,670) 2,521,000 18% Contractual Services 7,014,153 2,371,710 (4,642,443) - Surplus/(Deficit) (6,245,783)$ (625,752)$ 5,620,032$ 4,346,000$ -14% Item 3D - Page 9
City Council Staff Report
February 21, 2023 -- Page 10
Mid-Year FY 2022-23 Budget Update
There are currently no projects approved and funded by Passenger Facility Charge Fund.
General Airport Operations Fund – Revenue Highlights
The General Airport Operations Fund revenue ended the first two quarters of the fiscal year with total revenue at $25.7 million. This is an increase of 108% from the first two quarters of fiscal year 2022 due to the collection of the Coronavirus Aid, Relief, and Economic Security Act (CARES) and the Airport American Rescue Plan Act (ARPA) funds in the second quarter of FY23. A summary of mid-year revenue for FY23 versus FY22 is shown in Table 5 below. Mid-year highlights are presented as follows:
• The Airport received approximately $6.0 million from the CARES Act and approximately $6.0 million from the ARPA fund.
• On-Airport Car Rental Fees increased by 4%. Car Rental Fees at mid- year FY22 were approximately $3.9 million compared to FY23 at $4 million. • Airport Leased Parking increased by 13% due to an increase in passenger traffic.
Airport Leased Parking at mid- year FY22 were approximately $2.5 million compared to FY23 at $2.8 million
• Terminal Non -Airlines Commercial Rentals growth of 92% is driven by CLEAR leasing terminal space and the increase in sales from the food and beverage and retail concessionaire.
TABLE 5
GENERAL AIRPORT 2022 2023 2023 vs 2022
OPERATIONS FUND Q1 Q2 Q1 Q2 Mid-Year Total Mi d-Year Total Total Revenue 4,562,548$ 7,846,666$ 5,351,692$ 20,413,643$ 12,409,213$ 25,765,335$ 108% Cares Act Funds - - - 5,989,698 - 5,989,698 ARPA - Airport - - - 6,020,652 - 6,020,652 Parking Violation 618 844 797 1,497 1,462 2,294 57% Land Rental - 341 281,510 461,326 481,183 305,533 742,836 786,717 6% Leased Parking 1,127,945 1,416,915 1,243,388 1,633,148 2,544,860 2,876,536 13% Airport Use Permits 9,625 27,260 3,104 41,061 36,885 44,165 20% Term Non-Air Comm Rentals 150,458 340,477 373,690 567,647 490,935 941,337 92% On-Airport Rental Car 1,371,393 2,515,823 1,627,856 2,422,547 3,887,216 4,050,403 4% Off-Airport Rental Car 5,056 10,255 3,302 13,390 15,311 16,692 9% Commercial Airport Fee 123,129 162,269 93,943 249,601 285,399 343,544 20% Taxi Access Fees 105,685 250,752 106,037 326,824 356,437 432,861 21% Security Gate Passes-Id 8,847 9,767 8,930 19,970 18,614 28,900 55% Other Revenue 1,378,283 2,650,978 1,409,462 2,822,075 4,029,261 4,231,537 5% Total Expense 4,756,076$ 6,105,371$ 5,788,611$ 6,962,805$ 10,861,447$ 12,751,415$ 17% Administration 865,364 1,098,570 960,892.66 1,431,182.09 1,963,934 2,392,075 22% Airport IT - - 16.32 - - 16 Security 684,245 720,222 783,486.31 923,488.34 1,404,467 1,706,975 22% Airside Operations 75,151 210,429 80,364.23 118,966.00 285,581 199,330 -30% Rescue - Fire 863,992 816,854 932,453.43 1,082,110.52 1,680,846 2,014,564 20% Lan
dslide Operations 193,729 387,271 318,756.65 447,824.76 581,000 766,581 32% Grounds Maintenance 39,643 205,578 156,728.65 122,506.85 245,221 279,236 14% Terminal Building Operations 1,213,642 1,526,152 1,613,282.26 1,717,756.04 2,739,795 3,331,038 22% Passenger Boarding Bridges - - 1,834.72 4,138.53 - 5,973 Baggage Handling System - - 9,174.44 75,170.41 - 84,345 Control Center Operations 770,724 1,020,109 836,099.13 1,016,163.19 1,790,833 1,852,262 3% Customs 48,145 120,185 95,521.81 23,498.04 168,330 119,020 -29% Airport Capital Projects 1,440 - - - 1,440 - -100% Surplus/(Deficit) (193,529)$ 1,741,295$ (436,919)$ 13,450,838$ 1,547,767$ 13,013,920$ 2022 2023
Item 3D - Page 10-- -- -- -- ------
City Council Staff Report
February 21, 2023 -- Page 11
Mid-Year FY 2022-23 Budget Update
General Airport Operations Fund – Expense Highlights
The General Airport Operations Fund ended the first two quarters of the fiscal year with total expenses of $12.7 million. This is an increase of approximately 17% from fiscal year 2022. A summary of mid-year expenses for FY23 versus FY22 is shown in Table 5 above.
Mid-year highlights are presented below:
• Salary and Benefit expenses increased approximately 11% primarily due to the previously approved FY23 additional positions. Salaries and benefits at mid- year FY22 were approximately $6.6 million compared to FY23 at $7.3 million. • Airport Operational expenses increased by approximately 15% due to increases in airport utilities and advertising. Airport Operational expenses at mid- year FY22 were approximately $2.3 million compared to FY23 at $2.7 million. • Quarterly administrative fees payable to the City increased by approximately 31%.
The mid-year FY22 total administrative fees paid was $1.8 million compared to FY23 at $2.4 million.
General Airport Operations Fund Budgetary Highlights
The General Airport Operations Fund revenue totals at mid-year is 55% of the total FY23 budget. The Airport collects most of the revenue during the second half of the fiscal year, when travel is at its peak for Palm Springs. The passenger forecasts for the Airport are trending higher than FY22 by approximately 12%, so the airport will greatly benefit from these additional revenues. The airport also intends to collect approximately $5.9 million of Coronavirus Response and Relief Supplemental Appropriations A ct (CRRSAA) funds before the end of the fiscal year.
The General Airport Operations Fund expense totals at mid-year is 36% of the total FY23 budget. The airport intends to transfer out approximately $5.3 million to fund the Airport Capital Projects fund, at the end of the fiscal year. A summary of mid-year revenue and expenses for FY23 is shown in Table 6 on the following page.
Item 3D - Page 11
City Council Staff Report
February 21, 2023 -- Page 12
Mid-Year FY 2022-23 Budget Update
TABLE 6
Airport Capital Projects Fund
The Airport Capital Projects fund is for the airport’s various capital projects. The airport maintains a five-year Capital Program that is intended to address critical improvements.
The Capital Program includes capital improvement projects that address federal security requirements, airfield safety, environmental remediation, terminal upgrades, and development. The Airport intends to receive approximately $1 million in Airport Improvement Program (AIP) grant funds from the Federal Administration Agency (FAA) in FY23 to fund capital projects. The remaining projects will be funded out of the Airport Capital Projects fund balance.
A listing of all projects that have been approved and funded by the Airport Capital Fund can be seen at Attachment 10. Below is a partial list of projects funded by the Airport Capital Projects Fund:
Project No. Project Airport Capital Projects AIP064 Taxiway Rehabilitation Design $571 Thousand
GENERAL AIRPORT 2023 2023 % of Budget
OPERATIONS FUND Q1 Q2 M id-Year Total Budget Achieved
Total Revenue 5,351,692$ 20,413,643$ 25,765,335$ 47,090,050$ 55% Cares Act Funds - 5,989,698 5,989,698 5,989,698 100% CRRSAA-Airport - - - 1,100,000 0% CRRSAA-Concession - - - 4,800,000 0% ARPA - Airport - 6,020,652 6,020,652 6,020,652 100% Parking Violation 797 1,497 2,294 12,000 19% Land Rental - 341 481,183 305,533 786,717 1,223,000 64% Leased Parking 1,243,388 1,633,148 2,876,536 4,704,000 61% Airport Use Permits 3,104 41,061 44,165 75,000 59% On-Airport Rental Car 1,627,856 2,422,547 4,050,403 8,899,000 46% Off-Airport Rental Car 3,302 13,390 16,692 39,000 43% Commercial Airport Fee 93,943 249,601 343,544 853,000 40% Taxi Access Fees 106,037 326,824 432,861 667,000 65% Security Gate Passes-Id 8,930 19,970 28,900 47,000 61% Other Revenue 1,783,152 3,389,722 5,172,874 12,660,700 41% Total Expense 5,788,611$ 6,962,805$ 12,751,415$ 35,092,766$ 36% 99999 - Budget Transfer Out - - - 5,385,828 0% Administration 960,892.66 1,431,182.09 2,392,075 6,573,372 36% Airport IT 16.32 - 16 210,000 0% Security 783,486.31 923,488.34 1,706,975 3,138,357 54% Airside Operations 80,364.23 118,966.00 199,330 1,068,180 19% Rescue - Fire 932,453.43 1,082,110.52 2,014,564 4,226,602 48% Landslide Operations 318,756.65 447,824.76 766,581 1,538,049 50% Grounds Maintenance 156,728.65 122,506.85 279,236 662,081 42% Terminal Building Operations 1,613,282.26 1,717,756.04 3,331,038 7,060,112 47% Passenger Boarding Bridges 1,834.72 4,138.53 5,973 999 598% Baggage Handling System 9,174.44 75,170.41 84,345 722,979 12% Control Center Operations 836,099.13 1,016,163.19 1,852,262 4,229,679 44% Customs 95,521.81 23, 498.04 119,020 276,528 43% Surplus/(Deficit) (436,919)$ 13,450,838$ 13,013,920$ 11,997,284$ 108% 2023
Item 3D - Page 12
City Council Staff Report
February 21, 2023 -- Page 13
Mid-Year FY 2022-23 Budget Update
AIP065 Taxiway Hot Spot Study $181 Thousand
AIP066 Wildlife Hazard Assessment $127 Thousand
ARPT-SCP Airport Common Use & Carpet Renov. $1.1 Million ARPT-SCP Gate 16 Taxiway Repair $106 Thousand
ARPT-SCP Two Trash Compactors $123 Thousand
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with City Council Strategic Priority 4D, Good Governance.
FISCAL IMPACT
:
There is an update item only, so there is no fiscal impact at this time.
REVIEWED BY:
Acting Director of Finance: Kristopher J. Mooney
City Engineer: Joel Montalvo
Airport Administration Manager: Victoria A. Carpenter
Executive Director of Aviation: Harry Barrett Jr., A.A.E.
Interim City Manager: Teresa Gallavan
ATTACHMENTS:
1. Gas Tax Fund
2. Measure A Fund
3. Drainage Fund
4. Community Development Block Grant Fund
5. SB1 – Road Maintenance Rehab Account Fund
6. Quimby Act Fund
7. Measure J Fund
8. Capital Projects Fund
9. Wastewater Treatment Fund
10. Airport Capital Projects Listing
Item 3D - Page 13
ATTACHMENT 1
Gas Tax Fund
GAS TAX FUND
2023 2023 % Budget
Q1 Q2 YTD B udget Achieved YTD
Total Revenue 107,710$ 302, 010$ 409,719$ 1,394,633$ 29% 33530 - Gas Tax 107,710 291,554 399,264 1,394,633 29% 36000 - Interest Income - 10,455 10,455 - 37045 - Miscellaneous Revenue - - - - Total Expense 564,918 94,078 658,996 1,798,278 37% 3090 - Capital Projects 564,918 94,078 658,996 1,798,278 37% Net Income: (457,208) 207,932 (249,276) (403,645) 2023
GAS TAX FUND
Project
Number Project Number & Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
06-18 SOUTH PALM CANYON BRIDGE Design - 100% 125,947$ 357$ -$ 54$ -$ 125,537$ 17-03 TRAFFIC SIGNAL IMPROVEMENTS Completed 31,079 - - - 31,079 - 19-17 2019 CITYWIDE SPEED SURVEY Completed 27,880 14,727 - - 13,154 - 20-02 2020-2021 ANNUAL SLURRY SEAL Completed 128,817 128,817 - - - - 20-24 TRAFFIC CALMING FY20-21 Completed 100,713 39,534 - 41,188 19,992 - 2022 UNSCHEDULED CAPITAL IMPROVEMENTS Open 573,278 - 573,278 - - 1,146,556 21-02 ANNUAL SLURRY SEAL Completed 928,197 338,882 - 590,317 (1,002) - GAS TAX GAS TAX Completed 42,726 - - - 42,726 - SIGNINVTRY BIANNUAL SIGN INVENTORY Not started - - 300,000 - - 300,000 SLURRY ANNUAL SLURRY SEAL Scope Development - - 675,000 - - 675,000 TRAFCALM ANNUAL TRAFFIC CALMING In Process - - 250,000 27,438 - 222,562 TOTAL 1,958,637$ 522,315$ 1,798,278$ 658,996$ 105,949$ 2,469,655$ Item 3D - Page 14
--- --- ---
------------------------------------------------
ATTACHMENT 2
Measure A Fund
MEASURE A
2023 2023 % Budget
Q1 Q2 YTD B udget Achieved YTD
Total Revenue 85,068$ 1, 060,993$ 1,146,061$ 6,983,736$ 16% 31045 - Sales and Use Tax - 908,221 908,221 3,151,000 29% 33000 - Grants - - - - 33003 - Regional CVAG Funds 17,140 163,461 180,601 33500 - Transport Unif Mitigation Fee 65,926 (61,210) 4,716 36000 - Interest Income - 48,762 48,762 36010 - Unrealized Gain Or Loss - - - 3,424,333 0% 37015 - Contrib Non-Govt Sources 2,002 1,760 3,762 - 37045 - Miscellaneous Revenue - - - 408,403 0% Total Expense 32,997 284,147 317,144 9,773,916 3% 3090 - Capital Projects 32,997 284,147 317,144 9,773,916 3% 1115 - Budget Transfer Out - - - - Net Income: 52,071 776,846 828,917 (2,790,180) 2023
MEASURE A FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
01-11 INDIAN UNION PAC RR BRIDGE Award Con. Contract 6,259,419$ 457,990$ 4,099,120$ 61,310$ -$ 9,839,239$ 06-18 SOUTH PALM CANYON BRIDGE Design - 100% 322,415 273 346,044 62 - 668,124 07-03 BOGERT TRAIL POST-CONSTRUCTION In Process 74,904 - - - - 74,904 08-25 RAMON ROAD BRIDGE RW Phase - Design
95% 588,024 182,532 100,000 8,991 42,153 454,348 08-26 TAHQUITZ CREEK LEVEE IMPROVEMENTS Construction 8,231 - - - - 8,231 10-10 VISTA CHINO BRIDGE WW WASH Design - 60% 904,191 24,220 282,549 1,294 - 1,161,226 12-02 S PALM CYN TAHQUITZ CREEK Design - 100% 465,998 8,538 466,657 698 - 923,420 12-04 EPC PALM CYN WASH BRIDGE Design - 100% 200,533 94,750 167,807 12,485 - 261,105 15-21 TAHQUITZ CANYON/CIVIC DRIVE SIGNAL Completed 56,764 (2,460) - - 59,225 - 15-32 HSIP CYCLE 7 Construction 35,169 23,279 271,000 204,502 - 78,388 17-07 NPC PEDESTRIAN ENHANCEMENTS Construction 2,034,912 8,497 1,118,950 9,111 - 3,136,254 17-08 INDIAN CANYON TWO-WAY CONVERSION Completed 32,827 - - - 32,827 - 17-09 PEDESTRIAN SAFETY ENHANCEMENTS Completed 43,782 - - - 43,782 - 18-14 GENE AUTRY WIND WALL Design - 100% 54,694 40,538 2,036,739 2,564 - 2,048,331 20-02 2020-2021 ANNUAL SLURRY SEAL Completed 161,469 92,076 - - 69,393 - 20-19 DHUC TRAFFIC SIGNAL IMPRVMTS Construction 7,446 7,266 - - - 180 2022 UNSCHEDULED CAPITAL IMPROVEMENTS Open 194,931 - - - - 194,931 21-10 TRAFFIC CENTER COMM UPGRADE Scope Development 17,026 17,026 500,000 - - 500,000 21-34-1 INTERCHANGE PROJECTS, LOC MEAS A Not engineering 181,760 159,760 - 10,421 - 11,579 22-21 PEDESTRIAN STREETS MASTER PLAN In Process - - 500,000 - - 500,000 22-34 TRAFFIC SAFETY PROJECT Scope Development 282,845 - - - - 282,845 22-35 PAVEMENT CONDITION INDEX Study in Process 20,057 - 150,000 728 - 169,329 SLURRY ANNUAL SLURRY SEAL Scope Development - - 675,000 - - 675,000 TRAFCALM ANNUAL TRAFFIC CALMING In Process - - 250,000 4,979 - 245,021 N/A 134 BUDGET TRANSFER OUT - to Debt Service
Fund Open 619,500 619,500 - - - - TOTAL 12,566,897$ 1,733,783$ 10,963,866$ 317,144$ 247,380$ 21,232,456$ Item 3D - Page 15
-- -- --
-----------------------------------------------
ATTACHMENT 3
Drainage Fund
DRAINAGE FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Achieved YTD
Total Revenue 49,898$ 380,232$ 430,131$ 301,050$ 143% 3XXXXX - Drainage Fees 49,898 367,964 417,862 301,050 139% 36000 - Interest Income - 12,269 12,269 - 37045 - Miscellaneous Revenue - - - - Total Expense 2,243 2,424 4,667 846,615 1% 3090 - Capital Projects 2,243 2,424 4,667 846,615 1% Net Income: 47,656 377,808 425,464 (545,565) 2023
DRAINAGE FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
19-15 STORM DRAIN LINE 20 Design - 100% 467,444$ 72,602$ 810,000$ 4,667$ -$ 1,200,175$ 21-35-1 DRAINAGE Open 384,541 - 36,615 - - 421,156 TOTAL 851,985$ 72,602$ 846,615$ 4,667$ -$ 1,621,331$ Item 3D - Page 16
--- --- ---
------------------------------------------------
ATTACHMENT 4
Community Development Block Grant Fund
CDBG FUND
2023 2023 % Budget
Q1 Q2 YTD B udget Achieved YTD
Total Revenue -$ 546$ 546$ 1,289,197$ 0% 33000 - CDBG Grants - 1,289,197 0%
36000 - Interest Income - -
37045 - Miscellaneous Revenue 546 546 - Total Expense 81,326 22,392 103,718 1,289,197 8% 2320 - Salary & Benefits - 34,265 0% 2320 - Administrative Services - 86,000 0% 2320 - Special Programs 1,541 1,541 157,229 1% 2320 - Capital Projects 79,785 22,392 102,177 982,678 10% 0000 - Other - 29,025 0%
Net Income: (81,326) (21,846) (103,172) (0) 2023
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
19-13 SUNRISE PARK RESTROOM REMODEL Completed 550$ 550$ -$ -$ -$ -$ 19-14 DEMUTH CC Air Conditioner Completed 554,150 237,325 - 55,851 159,227 101,746 19-35 CDBG FY 2019-2020 Completed 8,545 7,170 - - 1,375 - 20-30 DEMUTH PARK RESTROOMS Completed 296,678 250,313 - 46,327 38 - 20-37-1 CDBG CARES ACT FUNDING FY20-21 Open 68,636 68,636 - - - - 20-37-2 CDBG CARES ACT 3 FUNDING FY20-21 Open 100,543 42,901 - - - 57,642 22-03 COMMUNITY DEV BLOCK GRANT 20-21 Open 9,902 867 - 1,541 - 7,494 22-03-21 CDBG GRANT FUNDING FY22 Open 154,178 137,986 - - - 16,192 22-25 DEMUTH AND BARISTO SHADE
STRUCTURES Scope Development - - 281,960 - - 281,960 23-52 COMMUNITY DEV BLOCK GRANT FY23 Open - - 142,989 - - 142,989 TOTAL 1,193,182$ 745,749$ 424,949$ 103,718$ 160,640$ 608,023$ Item 3D - Page 17
--- --- ---
------------------------------------------------
ATTACHMENT 5
SB1 – Road Maintenance Rehab Account Fund
SB1 - RMRA FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Achieved YTD
Total Revenue 155,739$ 180,306$ 336,045$ 1,088,536$ 31% 33590 - RMRA Tax 155,739 168,656 324,395 1,088,536 30% 36000 - Interest Income - 11,650 11,650 - 37045 - Miscellaneous Revenue - - - - Total Expense 4,817 66,590 71,407 1,088,536 7% 3090 - Capital Projects 4,817 66,590 71,407 1,088,536 7% Net Income: 150,922 113,717 264,639 - 2023
SB1 - RMRA FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
16-18 CYCLE 8 TRAFFIC SIGNAL IMPRV Award Con. Contract 117,871$ -$ 1,088,536$ -$ -$ 1,206,407$ 20-19 DHUC TRAFFIC SIGNAL IMPRVMTS Construction 674,094 25,560 - 42,196 - 606,338 20-33 SAN RAFAEL AVE CAB TRAF SIGNAL Construction 631,169 2,721 - 29,211 - 599,237 TOTAL 1,423,134$ 28,281$ 1,088,536$ 71,407$ -$ 2,411,982$ Item 3D - Page 18
--- --- ---
------------------------------------------------
ATTACHMENT 6
Quimby Act Fund
QUIMBY ACT FUND
2023 2023 % Budget
Q1 Q2 YTD B udget Achieved YTD
Total Revenue 215,999$ 98, 711$ 314,710$ 650,000$ 48% 34415 - Quimby Act Fees 215,999 78,250 294,249 580,000 51% 36000 - Interest Income - 20,461 20,461 70,000 29% 37045 - Miscellaneous Revenue - - - - Total Expense 37,721 29,402 67,123 150,000 45% 3090 - Capital Projects 37,721 29,402 67,123 150,000 45% Net Income: 178,278 69,309 247,587 500,000 2023
QUIMBY ACT FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
15-07 DOWNTOWN PARK PROJECT Final Punch List 1,076,462$ 297,291$ -$ 2,490$ -$ 776,681$ 20-31 DESERT HIGHLAND PARK RESTROOMS Completed 241,355 178,611 - 62,286 458 - 21-16 DEMUTH DOG PARK Scope Development 1,448,270 - - 2,347 - 1,445,923 22-24 PICKLEBALL COURTS Scope Development - - 150,000 - - 150,000 TOTAL 2,766,087$ 475,902$ 150,000$ 67,123$ 458$ 2,372,604$ Item 3D - Page 19
--- --- ---
-------------------------------------------------
ATTACHMENT 7
Measure J Fund
MEASURE J FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Achieved YTD
Total Revenue 1,540,230$ 5,218,471$ 6,758,701$ 20,352,400$ 33% 31050 - Measure J Sales Tax 1,540,230 5,030,709 6,570,939 20,352,400 32% 36000 - Interest Income - 187,762 187,762 - 37045 - Miscellaneous Revenue - - - - Total Expense 3,418,144 1,609,211 5,027,355 32,834,385 15% 3080 - Measure J Capital Projects 2,098,688 164,416 2,263,104 26,396,150 9% 1115 - Budget Transfer Out 1,284,625 1,284,625 2,569,250 5,138,500 50% 0000 - Other 34,831 160,170 195,001 1,299,735 15% Net Income: (1,877,915) 3,609,260 1,731,345 (12,481,985) 2023
MEASURE J FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
15-07 DOWNTOWN PARK PROJECT Final Punch List 1,596,446$ 710,255$ -$ 838$ -$ 885,353$ 16-08 MAIN LIBRARY RENOVATIONS Scope Development - - 4,138,650 199 - 4,138,451 17-07 NPC Pedestrian Enhancements Construction 2,000,000 12,569 - 14,184 - 1,973,248 17-08 INDIAN CANYON TWO-WAY CONVERSION Completed 22,542 188 - - 22,353 - 17-09 PEDESTRIAN SAFETY ENHANCEMENTS Completed 1,147,801 706 - - 1,147,095 - 18-06 VICTORIA RTHHRDY RESTROOMS Not Started 270,000 - 950,000 - - 1,220,000 18-09 FIRE TRAINING FACILITY Not Started 400,000 - 750,000 - - 1,150,000 19-13 SUNRISE PARK RESTROOM REMODEL Completed 86,747 85,900 - - 847 - 19-16 PD 911 CAD RMS Open 1,775,663 75,557 - 28,125 - 1,671,980 19-23 KEYLESSS ENTRY PHASE 2 Scope Development 3,348 - 200,000 - - 203,348 19-24 DEMUTH PARK ADA ACCESS PH2 RFP Design Services - - 600,000 3,222 - 596,778 19-25 LIFE SAFETY IMPRV FIRE SPRKLR Not Started - - 900,000 - - 900,000 19-26 EMERGENCY GENERATORS CITYFAC Not Started 600,000 - 600,000 - - 1,200,000 19-27 HVAC CITY WATER TREATMENT PRGM Not Started 100,000 - 507,500 - - 607,500 19-28 RECREATIONAL LED LIGHTING UPGR Out to Bid 694,219 45,349 4,100,000 23,075 - 4,725,795 19-36 TMC & SIGNAL TIMING OPTIMIZATION Under Design 59,424 17,549 - - - 41,875 20-03 PALM CYN INDIAN ROUNDABOUT Under Design 310,300 85,204 400,000 33,000 - 592,096 20-04 SUNRISE PLAZA HVAC IMPROVEMENTS Not Started - - 400,000 - - 400,000 20-22 CITY HALL & PD COOLING TOWERS Completed 14,493 - - 7,963 6,530 - 20-26 GYM FLOOR REPLACEMENT AT JOJDHUC Co mpleted 4,916 - - - 4,916 - 20-27 Pavilion Acoustic Curtains Completed 133,306 5,760 - 97,286 10,175 20,085 20-28 SHADE STRUCTURES AT PARKS Completed 16,835 1,965 - - 14,870 - 20-29 PLAYGROUND SURFACING Completed 769,265 735,693 - 310 33,262 - 20-30 DEMUTH PARK RESTROOMS Completed 285,136 120,496 - 71,989 92,645 6 20-31 DESERT HIGHLAND PARK RESTROOMS Completed 213,304 169,226 - 43,760 - 318 21-01 ANNUAL PAVEMENT REHABILITATION Completed 5,998,293 5,983,348 - 1,135 13,810 - 21-16 DEMUTH DOG PARK Scope Development 202,000 - - - - 202,000 21-17 ARNICO TRACT SEWER PHASE 4 Completed Design 585,000 50 200,000 - - 784,950 22-10 PD WATCHGUARD BODY CAMERAS Open 116,270 116,270 - - - - 22-11-2 PARK BENCHES Open 10,000 - - - - 10,000 22-11-3 PAVILION LANDSCAPING Open 10,000 - - - - 10,000 22-14 CONVENTION CTR CARPET REPLACEMENT Bidding - - 650,000 650,000 - - 22-16 CONVENTIONCTR HOUSTON PLAZA UPGRADE Scope Development - - 100,000 100,000 - - 22-18 CONVENTION CENTER RETROFIT LIGHTING Bidding - - 500,000 500,000 - - 22-18-1 DOWNTOWN PROJECT ELEVATOR EASEMENTS Open 5,628 5,628 - - - - 22-19 RELOCATE FIRE STATION 1 Not Started - - 1,600,000 - - 1,600,000 22-19-1 DOWNTOWN PROJECT RESTROOMS Open 37,994 37,994 - - - - N/A 260.2 DOWNTOWN MAINT. UNALLOCATED (NO PROJECT) Open 1,306,379 552,675 400,000 180,817 - 972,886 22-20 COMMUNITY INITIATED PROJECTS (detail next page) In Process - - 3,000,000 181,437 - 2,818,563 22-21 PEDESTRIAN STREETS MASTER PLAN Scope Development - - 500,000 - - 500,000 22-24 PICKLEBALL COURTS Scope Development - - 150,000 - - 150,000 22-25-1 DOWNTOWN PROJECT-DSRTFASHIONPLAZA Open 8,863 - - - - 8,863 22-26 SAN RAFAEL DRIVE TURF CONVERSION Not Started - - 150,000 - - 150,000 22-30 CULTURAL CENTER SEWER LATERAL Agreement In Process - - 199,735 - - 199,735 22-32-1 PROPERTY MAINTENANCE/LANDSCAPE Open 95,121 - - - - 95,121 22-37-1 AIRP RES-FUEL FAA Open 1,095,000 - 200,000 - - 1,295,000 23-51 Mizell Center Check Issued - - 500,000 500,000 - - PAVING ANNUAL PAVING REHABILITATION Under Construction 3,000,000 - 6,000,000 7,927 - 8,992,073 Item 3D - Page 20
-- -- --
-------------------------------------------------
MEASURE J FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
18-04 -MEAS J PLAZA THEATER - TRANSFERRED TO GENERAL FUND Completed - - - 12,839 (47,604) 34,765 14-20 OTHER On Hold 8,582 - - - - 8,582 SUBTOTAL 22,982,875$ 8,762,383$ 27,695,885$ 2,458,106$ 1,298,899$ 38,159,372$ Measure J Interfund Items
18-04 PLAZA THEATER IMPROVEMENTS Under Design -$ -$ 1,000,000$ 500,000$ -$ 500,000$ PD RADIOS PD RADIOS Open - - 1,000,000 500,000 - 500,000 DEBT Measure J Debt Service (current year's figures only) N/A 1,402,832 1,402,832 3,138,500 1,569,250 - 1,569,250 SUBTOTAL 1,402,832$ 1,402,832$ 5,138,500$ 2,569,250$ -$ 2,569,250$ GRAND TOTAL 24,385,707$ 10,165,215$ 32,834,385$ 5,027,356$ 1,298,899$ 40,728,622$ Item 3D - Page 21
I
ATTACHMENT 8
Capital Projects Fund
CAPITAL PROJECTS FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Ac hieved YTD
Total Revenue 1,739,533$ 2,891, 585$ 4,631,118$ 37,966,614$ 12% 33000 - Grants 290 74,955 75,246 28,568,214 0% 32130 - Technology Fee 115,237 308,515 423,752 100,000 424% 33590 - Traffic Signal Rehab 748,336 748,336 1,399,200 53% 33595 - City Facilities - 1,399,200 0% 36000 - Interest Income 80,586 80,586 - 37045 - Miscellaneous Revenue (994) 54,191 53,197 - 39999 - Budget Transfer In 1,625,000 1,625,000 3,250,000 6,500,000 50% Total Expense 1,202,351 1,149,788 2,352,139 45,751,526 5% 50126 - Grant Expense 824,255 937,097 1,761,352 34,268,319 5% 2320 - Capital Projects 378,096 212,691 590,786 11,483,207 5% 0000 - Other - - - - Net Income: 537,182 1,741,797 2,278,979 (7,784,912) 2023
CAPITAL PROJECTS FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
01-11 INDIAN UNION PAC RR BRIDGE Award Con. Contract 10,655,723$ 514,271$ 8,142,905$ 63, 243$ -$ 18,221,114$ 06-18 SOUTH PALM CANYON BRIDGE Design - 100% 477,654 15,076 4,600,506 1, 235 - 5,061,849 08-25 RAMON ROAD BRIDGE RW Phase - Design 95% 539,610 213,559 - 46,992 - 279,059 08-26 TAHQUITZ CREEK LEVEE IMPROVEMENTS Construction 34,214 - - - - 34,214 10-10 VISTA CHINO BRIDGE WW WASH Design - 60% 7,261,076 187,931 2,907,767 9,980 - 9,970,932 12-02 S PALM CYN TAHQUITZ CREEK Design - 100% 4,414,838 27,318 3,601,843 5,382 - 7,983,981 12-04 EPC PALM CYN WASH BRIDGE Design - 100% 542,803 197,550 1,295,193 96,356 - 1,544,090 15-21 Tahquitz Canyon/Civic Drive Signal Completed 33,621 5,321 - - 28,301 - 15-32 HSIP CYCLE 7 Construction 3,260,443 725,764 - 1,606,504 - 928,175 16-02 WELWOOD LIBRARY LANDSCAPE PATIO Completed 101,604 101 - - 101,503 - 16-04 EVALUATION OF CITY FACILITIES In Process 143,167 - - - - 143,167 16-08 MAIN LIBRARY RENOVATIONS Scope Developement - - 4,138,650 - - 4,138,650 16-18 CYCLE 8 TRAFFIC SIGNAL IMPRV Award Con. Contract 2,296,558 37,354 550,000 2,014 - 2,807,190 16-19 FLASHING BEACONS CYCLE 8 Construction 1,057,129 27,413 - 9,190 - 1,020,526 17-03 TRAFFIC SIGNAL IMPROVEMENTS Completed 1,568 339 - - - 1,228 17-05 TRAFFIC SIGNAL IMPROVEMENTS Completed - 339 - - (1,568) 1,228 17-08 INDIAN CANYON TWO-WAY CONVERSION Completed 70,848 339 - - 70,246 263 18-04 PLAZA THEATER IMPROVEMENTS Design 4,524 - - - - 4,524 18-05 CYCLE 9 TRAFFIC SIGNAL IMPRV Preliminary Design 71,265 49,760 1,399,200 3,144 - 1,417,560 18-20 SKYLIGHT RAILINGS Bidding Phase 456,876 - 397,780 - - 854,656 19-06 PICKLEBALL COURTS AT SUNRISE PARK Scope Developement 26,796 - - - - 26,796 19-14 DEMUTH CC Air Conditioner Construction 936,887 369,066 - 76,484 - 491,336 19-15 STORM DRAIN LINE 20 De sign - 100% - - 7,520,000 - - 7,520,000 19-19 CITY YARD ROOF REPLACEMENT Completed 250,000 3,271 - 193,577 43,152 10,000 19-23 KEYLESSS ENTRY PHASE 2 Not Started 42,649 - - - - 42,649 19-30 ENTERPRISE RESOURCE PLANNER SYSTEM Open -IT Dept. 1,020,672 409,406 533,970 27,800 - 1,117,436 20-03 PALM CYN INDIAN ROUNDABOUT Design - 60% - - 200,000 - - 200,000 20-04 SUNRISE PLAZA HVAC IMPROVEMENTS Not Started 100,000 - - - - 100,000 20-06 CITY HALL PD ELECTRICAL UPGRADES Not Started 480,000 - 200,000 605 - 679,395 20-08 FLEET OPS HVAC ELECTRICAL IMPRV Not Started 100,000 - 200,000 - - 300,000 20-10 SUNRISE PLAZA DOOR WINDOW REPLACE Not Started 100,000 - 200,000 - - 300,000 20-21 LOCAL SAFETY PLAN In Process 47,311 54,523 500,000 152 - 492,636 20-22 CITY HALL & PD COOLING TOWERS Completed 233,773 227,034 - 7,373 (634) - 20-26 GYM FLOOR REPLACEMENT AT JOJDHUC Completed 25,946 576 - - 25,370 - 2022 UNSCHEDULED CAPITAL IMPROVEMENTS Open 1,292,705 - - - - 1,292,705 21-12 BICYCLE PED - SB 821 HAWK SYSTEM Construction 213,500 19,225 300,000 14,016 - 480,259 21-22 DHUC BALL PARK IMPROVEMENTS Completed 75,000 1,075 - 19,136 54,790 - Item 3D - Page 22
--- --- ---
-------------------------------------------------
CAPITAL PROJECTS FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
21-25 TRAFFIC PLAN REVIEW In Process 22,000 22,000 100, 000 39 - 99,961 21-32 SWIM CENTER SHADE STRUCTURES Completed 132,737 1,148 - 98,345 33,244 - 22-01-2 ACBCI TECHNOLOGY DONATION - PD Open 132,100 24,748 - - - 107,352 22-09-1 TECHNOLOGY ENHANCEMENT Open 198,235 198,159 1,447,325 69,945 - 1,377,457 22-09-3 CITY WIDE CAMERA REPAIRS Open 20,000 200 19,801 - - 39,601 22-21 PEDESTRIAN STREETS MASTER PLAN In Process - - 500,000 626 - 499,374 N/A CAP OTHER PROJECTS Open - - 364,486 - - 364,486 N/A GRNT OTHER PROJECTS Open - - 132,100 - - 132,100 22-30-1 FIRE DEPARTMENT PROJECTS/GRANTS Completed 364,486 191,790 - - (6,674) 179,370 PARKSIMP PARKS IMPROVEMENT CIP Open - - 3,000,000 - - 3,000,000 PD RADIOS PD RADIOS Open - - 3,500,000 - - 3,500,000 TOTAL 37,238,318$ 3,524,655$ 45,751,526$ 2,352,139$ 347,730$ 76,765,320$ Item 3D - Page 23
ATTACHMENT 9
Wastewater Treatment Fund
WASTEWATER FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Achieved YTD
Total Revenue 299,038$ 791,743$ 1,090,782$ 12,007, 000$ 9% 36000 - Interest Income - 286,136 286,136 150,000 191% 36010 - Unrealized Gain Or Loss - - - - 37050 - Cashier Over - - - - 38700 - Sewer Service Charges 100,553 260,291 360,845 10,600,000 3% 38705 - Sewer Connection Fee 83,438 35,938 119,376 800,000 15% 38710 - Sewer Street Maint Chg 4,380 1,680 6,060 7,000 87% 38715 - Septage Hauler 110,667 207,698 318,365 450,000 71% 38725 - Clean Water State Rev Fund - - - - 38730 - Miscellaneous - - - - 39999 - Budget Transfer In - - - - Total Expense 1,890,695 1,432,284 3,322,978 27,239,524 12% 7500 - Wastewater 1,890,695 1,432,284 3,322,978 27,239,524 12% Net Income: (1,591,656) (640,540) (2,232,197) (15,232,524) 2023
WASTEWATER FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
01-11 INDIAN UNION PAC RR BRIDGE Award Con. Contract 4,000,000 6,689 6,000,000 - - 9,993,311 08-26 TAHQUITZ CREEK LEVEE IMPROVEMENTS Construction 155,353 71 - - - 155,282 15-26 BIOGAS TO ENERGY WWTP Hold 1,000,000 - - - - 1,000,000 17-12 WWTP WDR TECHNICAL STUDIES Completed - 12,614 - 79 (28,139) 15,446 18-18 BOGERT SEWER LIFT STATION Construction 2,537,500 34,319 384,633 13,642 - 2,874,172 18-19 WWTP CIP AND RATE STUDY Hold 285,333 55,901 - - - 229,432 20-14 WWTP FIRE SPRINKLER/ALARM UPGRADES Hold 5,255 - - - - 5,255 20-15 WWTP BIOSOLIDS HANDLING AREA
UPGRAD Completed 1,312,099 1,090,258 - 236 221,605 - 20-17 SEWER MANHOLE REHABILITATION PROJ Completed 13,623 - - - 13,623 - 20-25 DIGESTER 2 AND GAS FLARE Construction 18,237,958 344,880 - 1,599,683 - 16,293,395 2022 UNSCHEDULED CAPITAL IMPROVEMENTS Open 4,375 - - - - 4,375 21-04 WWTP SITEWORK PAVEMENT REHAB Hold - - 150,000 - - 150,000 21-05 WWTP SLUDGE DRYING BEDS Design - 100% 429,898 118,003 706,000 2,030 - 1,015,865 21-06 WWTP DEMO ADANDONED HEADWORKS Design - 90% - - 1,842,750 - - 1,842,750 21-07 WWTP FILTRATE PUMP STATION
UPGRADES Construction 754,549 223,650 - 36,057 - 494,843 21-08 WWTP BIOSOLIDS DEWATERING FACILITY Hold 4,999,959 234 2,000,000 - - 6,999,725 21-11 WWTP BLOCK WALL Closed 339,005 43,313 - - - 295,692 21-15 WWTP FIBER OPTIC LINE Hold 36,619 - - 36,619 - - 21-17 ARNICO TRACT SEWER PHASE 4 Design - 100% 100,000 24,626 - 12,745 - 62,629 21-18 2021 SEWER REPAIRS In Process 741,991 578,797 - - - 163,194 22-22-1 SOLAR PERF.GUARNT WWTP Open 219,510 - - - - 219,510 22-38-1 WWTP MOTOR VEHICLES Open 775,790 - - - - 775,790 22-41 BARISTO RD SEWER PIPE SEGMENT Construction - - 171,569 - - 171,569 22-42 LIFT STATION ONE ASSESSMENT Long Term Study in
Process - - 44,600 - - 44,600 22-43 LIFT STATION ONE IMPROVEMENTS Construction - - 598,828 - - 598,828 TOTAL 35,948,818$ 2,533,354$ 11,898,380$ 1,701,090$ 207,090$ 43,405,664$ Item 3D - Page 24
-- -- --
----------------------------------------------
ATTACHMENT 10
Airport Capital Projects Listing
AIRPORT CAPITAL PROJECTS FUND
2023 2023 % Budget
Q1 Q2 YTD Budget Achieved YTD
Total Revenue -$ 2,412,851$ 2,412,851$ 12,038,000$ 20% 33000 - Grants - - - - 36000 - Interest Income - 41,141 41,141 - 36010 - Unrealized Gain Or Loss - - - - 37050 - Cashier Over - - - - 38015 - Federal Grants - - - 7,406,922 0% 38205 - Airport Security Act 2001 - - - - 39999 - Budget Transfer In - 2,371,710 2,371,710 4,631,078 51% Total Expense 491,945 2,602,466 3,094,410 17,121,318 18% 7065 - Airport Capital Projects 442,126 263,623 705,749 4,902,975 14% 7070 - Grants 49,819 411,646 461,465 10,235,503 5% 7075 - PFC Funds - 1,927,196 1,927,196 1,982,840 97% Net Income: (491,945) (189,615) (681,560) (5,083,318) 2023
AIRPORT CAPITAL PROJECTS FUND
Project
Number Project Name Status FY21-22
Budget
FY21-22
Expenditures
FY22-23
Budget
FY22-23
Expenditures
Transfers &
Completions
Remaining
Balance
19-34 AIRPORT PASSENGER BOARDING
BRIDGES Open -$ 4,078,125$ -$ 55,446$ -$ (4,133,571)$ 22-02-1 AIP 3-06-0180-056-2019 Open 667,923 - - - - 667,923 22-06 AIP-3-6-0181-057-2019 Open 191,192 - - - - 191,192 22-06-1 AIP057 PAVEMENT CONDITION INDEX Open 10,911,108 - - - - 10,911,108 22-29-1 PSP SERVER PURCHASE Open - 627,825 - - - (627,825) AIP064 AIP 3-06-0181-064-2022 Open - 6,000 630,000 - - 624,000 AIP065 AIP 3-06-0181-065-2022 Open - 4,000 200,000 10,732 - 185,268 AIP066 AIP 3-06-0181-066-2022 Open 133,892 4,000 140,000 - - 269,892 AIP54-2016 AIP 3-06-0181-054-2016 Open 28,216 - - - - 28,216 AIP56-2019 AIP 3-06-0181-056-2019 Open 8,879,906 530,650 - 89,581 - 8,259,675 AIP57-2019 AIP 3-06-0181-057-2019 Open 829,245 11,413 - - - 817,832 AIP58-2020 AIP 3-06-0181-058-2020 Open 3,270,736 109,874 - 369,519 - 2,791,343 ARPT-SCP Airport Special Capital Projects Open 4,707,493 229,415 4,127,560 641,936 - 7,963,701 PFC LOCAL PFC LOCAL FUNDS Open 18,268,529 4,344,823 - 1,927,196 - 11,996,510 TSAOTA GRN TSA 100% OTA GRANT Open 120,370 - - - - 120,370 N/A TAXIWAY REHAB - FAA Pending 5,892,900 - - 5,892,900 N/A TAXIWAY REHAB - LOCAL Pending 607,100 607,100 N/A MASTER PLAN - FAA Pending 453,300 453,300
N/A MASTER PLAN - INTERNAL Pending 46,700 46,700 N/A DESIGN HOTSPOT STUDY - FAA Pending 181,320 181,320 N/A DESIGN HOTSPOT STUDY - INTERNAL Pending 18,680 18,680 TOTAL 48,008,610$ 9,946,126$ 12,297,560$ 3,094,411$ -$ 47,265,634$ Item 3D - Page 25
--- --- ---
------------------------------------------------
CITY COUNCIL STAFF REPORT
02/21/2023
SUBJECT:
DISCUSSION REGARDING REGULATORY APPROACH TO MANAGED
CO-OWNED PROPERTIES (PACASO)
RECOMMENDATION:
Discuss and provide direction to staff regarding a possible regulatory approach to managed co-owned properties.
Attachments
Item 3E
CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 21, 2023 BUSINESS & LEGISLATIVE
SUBJECT: DISCUSSION REGARDING REGULATORY APPROACH TO MANAGED
CO-OWNED PROPERTIES (PACASO)
FROM: Teresa Gallavan, Interim City Manager
BY: Jeffrey S. Ballinger, City Attorney
SUMMARY:
This agenda item provides the City Council with the opportunity to discuss a possible regulatory approach to managed co-owned properties. Specifically, City staff and the City Attorney are seeking direction as to whether, and how, the City Council might be interested in allowing and regulating managed co-owned residential properties, such as those marketed, sold, and managed by companies such as Pacaso.
RECOMMENDATION:
Discuss and provide direction to staff regarding a possible regulatory approach to managed co-owned properties.
BACKGROUND:
This agenda item provides the City Council an opportunity to discuss a relatively new business model that began operating within the City of Palm Springs in late 2021.
Specifically, a company named Pacaso purchases residential properties, then sells those properties to a limited liability company (“LLC”), which LLC is owned by up to eight (8) owners. The owners of the LLC are thereby entitled to use and occupancy of the residence for short periods of time. Pacaso also provides property management services to the LLC owners, though the owners are not required by Pacaso to use those services.
Although this staff report and discussion references Pacaso, it is entirely conceivable that any number of similar companies might model themselves after Pacaso, just as what happened with other recent emergent technologies, such as Uber (for vehicle transportation) or Limebikes (for electric scooters/bicycles).
The City Council is requested to discuss this business model and land use and provide direction to City staff and the City Attorney as to what, if any, different approach the City Item 3E - Page 1
Council would like to take with regard to this business model/land use.
It should be noted that this agenda item is not
a discussion of vacation rentals. Pacaso’s
business model involves multiple property owners – not renters. Therefore, the City’s vacation rental ordinance does not apply to Pacaso’s business model. This agenda item is solely focused on the business model that Pacaso is currently operating under.
The City Council considered this matter at the March 10, 2022 City Council meeting. As discussed in the staff report for that meeting ( Attachment 1 ), City staff and the City Attorney interpreted the City’s existing Zoning ordinance in a way that Pacaso’s operations qualify as a “timeshare” under the City’s Zoning ordinance. Under that interpretation, Pacaso’s operations would be prohibited in residential zones in the City .
Pacaso disagreed with the City’s interpretation.
At the March 10, 2022 City Council meeting, the City Council indicated that it did not wish to allow operations such as Pacaso’s, unless such operations were strictly regulated, as the City does with vacation rentals.
Following the March 2022 Council meeting, City staff and the City Attorney met with representatives of Pacaso twice. At those meetings, the City identified some of the primary concerns of the City. Namely, the City raised concerns with the potential impacts to neighbors arising from the semi-transient use of the properties by the multiple owners.
These secondary impacts include noise, parking and number of occupants staying at the residences. In addition, the City expressed concern about the impacts to property values that might be caused by the Pacaso model, and how that might affect the affordability of housing within the City.
As a result of those meetings, Pacaso presented to City staff and the City Attorney a draft regulatory approach to managed co-owned properties, such as Pacaso’s. Accompanying this staff report as Attachment 2 is a copy of Pacaso’s draft regulatory approach. Below is a summary of the approach.
STAFF ANALYSIS:
Under the regulatory approach proposed by Pacaso, the City Council would adopt an ordinance that permits, but regulates, operations such as Pacaso’s business model. The ordinance would require “co- owned property managers” to obtain a certificate from the City, similar to what the City requires for vacation rentals. A “Co-owned property manager” would be defined as “a person, corporation, trust, or entity that manages a Co-owned Housing Unit, including providing cleaning services and maintenance of the co- owned housing unit, on behalf of the owners of the Co- Owned Housing Unit. ” A “Co -Owned Housing Unit”, in turn, w ould be defined as, “a residential dwelling unit, managed by a Co-owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to ten owners or ten members of a Limited Liability Company that owns the dwelling unit, along with authorized guests.”
Item 3E - Page 2
In order to address the City’s stated concerns with regard to impacts on neighbors, t he ordinance would go on to regulate the use of co- owned housing units . Specifically, the proposed regulatory ordinance would:
• Restrict co-owned housing permits to one home per block.
Note: The City would waive this density restriction if the applicant furnishes a development agreement or letter from a Homeowners Association endorsing such waiver.
• Establish annual fee for co- owned housing unit permits at no more than $5,000 per home.
• Authorize an annual fee Property Management registrations to be set by resolution of the City Council.
• Require applicants to prove that co-owned homes are not prohibited by the CC&Rs of a HOA at the time of the application submission.
• Establish occupancy limits at two (2) people per bedroom for overnight guests Note: this restriction excludes children under 12 years of age. • Establish normal home maintenance hours between 8am - 5pm on Monday-Friday, for such things as yard/garden work, pool cleaning, etc. • Require Co-owned Property Management companies to maintain a valid business license issued by the City.
• Require each home to maintain homeowner ’s insurance with at least $2M in liability coverage.
• Prohibit weddings or commercial events at co-owned housing units. • Require occupants and guests to park all vehicles on the property Note: Proposed exception for landscape & maintenance commercial vehicles and any cars parked for less than 1 hour.
• R equire occupants to comply with the City’s noise ordinance (PSMC Chapter
11.74).
• Establish penalties for noncompliance (misdemeanor, $500 for first offense, $1,000 for each subsequent violation).
• Establish a $5,000 fine and $10,000 fine for subsequent violations for failure to register as a co-owned housing unit.
• Establish a $5,000 fine and $10,000 fine for subsequent violations if the co-owned housing unit is used as an STR.
• Establish a $5,000 fine and $10,000 fine for subsequent violations for reporting false claims against a co-owned property manager or co-owned housing unit.
In addition, in order to address the City’s stated concerns with regard to impacts on residential property values, the ordinance would provide that the City would not issue a permit for a co- owned housing unit unless the property has a recorded purchase price greater than two (2) times the then median housing price, as measured at the time of the purchase. The c ap of one home per block is also designed to limit the number of residential units that are used as secondary homes by multiple owners.
According to Pacaso’s analysis, as of approximately June of 2022, there were seventy - Item 3E - Page 3
four (74) active real estate listings of residential units that also would not exceed the one per block cap.
City staff and the City Attorney’s Office believe that the proposed regulatory approach represents a good faith attempt to address the concerns raised at the March 2022 City Council meeting. Obviously, should the Council direct staff to pursue a regulatory approach, a key provision will have to be the enforcement provisions of any such ordinance. As the City has seen with its vacation rental program, enforcement is key to a successful regulatory approach.
Unlike vacation rentals, which are owned by a limited number of natural persons, and the permit for which can be revoked, the revocation of a managed co- owned housing unit would present a challenge for the property owners with respect to what can thereafter be done with the property. One option would be to provide that if a managed co- owned property no longer has a management company, that property would be classified as a prohibited use in residential zones, such as is the case with timeshares.
ENVIRONMENTAL ASSESSMENT
:
This agenda item is exempt from further environmental review. Should the City Council provide direction to further explore and potentially bring forward a regulatory ordinance, an assessment will be performed at that time in order to determine what level of environmental review is appropriate.
ALIGNMENT WITH STRATEGIC PLANNING:
This agenda item aligns with the City Council’s goal of focusing on items that impact quality of life, by ensuring that residential properties that are co-owned by multiple owners do not become a nuisance to neighbors or unduly impact affordability of homes within the City.
FISCAL IMPACT:
Any regulatory approach would be accompanied by a regulatory fee that would be collected by the City in order to appropriately offset the costs of administering the regulatory program.
REVIEWED BY:
City Attorney: Jeffrey S. Ballinger
Interim City Manager: Teresa Gallavan
ATTACHMENTS:
A. March 10, 2022 Staff Report
B. Draft Regulatory Ordinance
Item 3E - Page 4
CITY COUNCIL STAFF REPORT
DATE: March 10, 2022 BUSINESS
SUBJECT: DISCUSSION AND DIRECTION REGARDING PACASO AND SIMILAR
OPERATIONS WITHIN THE CITY OF PALM SPRINGS
FROM: Justin Clifton, City Manager
BY: Jeffrey S. Ballinger, City Attorney
RECOMMENDATION:
1. Discuss and provide direction to City S taff regarding Pacaso, and other similar operations, within the City of Palm Springs.
SUMMARY:
This agenda item provides the City Council an opportunity to discuss a relatively new business model that has begun operating within the City of Palm Springs. Specifically, a company named Pacaso, which purchases residential properties, then sells those properties to a limited liability company (“LLC”), which LLC is owned by up to eight (8) owners. The owners of the LLC are thereby entitled to use and occupancy of the residence for short periods of time. Pacaso also provide property management services to the LLC owners.
The City Council is requested to discuss this operation and provide direction to City Staff and the City Attorney as to what, if any, different approach the City Council would like to take with regard to this business model.
It should be noted that this agenda item is not intended to be a discussion of vacation rentals. The City intends to make vacation rentals the focus of a separate City Council workshop in April. This agenda item is solely focused on the business model that Pacaso 1 is currently operating under.
1 Although this staff report and discussion references Pacaso, it is entirely conceivable that any number of similar companies might model themselves after Pacaso, just as what happened with other emergent technologies, such as Uber (for vehicle transportation) or Limebikes (for electric scooters/bicycles).
Item 3E - Page 5
FACTUAL BACKGROUND:
Pacaso
is a relatively new company that holds itself out as a new way to own a second home. According to Pacaso’s website ( https://www.pacaso.com/learn), accessed in 2021, Pacaso operates as follows:
“Co-ownership with Pacaso is the best way to buy and own a great second home. From buying to closing here’s how Pacaso works. First, t ell us a little about yourself and what you are looking for in a second home. Then, start shopping. If a listing currently on Pacaso is not a fit, find one you love on any real estate site and share it with us. If the home is a match for Pacaso, we will partner with you to purchase up to half of the property in a private and professionally managed LLC uniquely designed for co- ownership. This LLC is referred to as the Pacaso Home LLC. On behalf of Pacaso, we line up financing for the LLC and close quick ly. In parallel Pacaso remarkets remaining ownerships shares in the home to interested buyers. Buyers can purchase their desired amount of ownership from one- eighth to one-half of the whole home. We enable qualified buyers to access funds in the LLC and finance up to half of their purchase. The financing relationship is directly between the LLC and the buyer. Pacaso signs closing paperwork on behalf of the LLC. In parallel buyer signs the LLC owner operating agreement to complete their purchase. Ownership is recorded in the owner’s schedule section of the owner operating agreement.
Following closing the collective owners own 100% ownership interest in the LLC. We transform the home with modern interior design and address any necessary repairs. Owners use the mobile app to book stays 2 days to 24 months in advance. Scheduling is easy and equitable based on the number of shares owned. From there we take care of everything, overseeing local property management, bill pay and platform technology, all from the mobile app. Owners simply show up, relax and enjoy their Pacaso.” The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2- 7 nights counts as one general stay, while a stay with a duration of 8- 14 nights counts as 2 general stays.
Owners of two shares have the option to book stays up to 28 nights.
Pacaso asserts that it is not a timeshare.
2 According to Pacaso, a Pacaso home is no
different from any other single family residence. Pacaso further asserts that Pacaso co- owners agree to several restrictions to help ensure that their use promotes the public interest, safety and comfort. For example, Pacaso states that there is a maximum of eight co-owners for any home, with only one family using the property at a time; co-owners are 2 Attachment 2 to this Staff Report is Pacaso’s January 21, 2022 response to the City Attorney’s December 6, 2021 letter (Attachment 1).
Item 3E - Page 6
prohibited from having large events or parties that exceed the maximum occupancy of the home; co-o wners must adhere to a 9pm to 7 am quiet hour policy; co- owners are prohibited from renting the home; and Pacaso encouraged homeowners to avoid parking on the street unless absolutely necessary. Pacaso does not provide any documentation or explanation of how these rules are enforced. Owner compliance with these rules is monitored not only by other co- owners, but also by Pacaso as the property manager.
Also, each owner can book the property to use themselves, or may allow guests to use the residence, whether or not the co-owner is present.
According to Pacaso, as of September of 2021, one residence within Palm Springs has been fully sold, and Pacaso was marketing four others in the City.
Finally, Pacaso has sued the City of St. Helena , California, and has been extremely aggressive in other communities that have asserted a right to regulate Pacaso, including alleging those communities are discriminating against a variety of minority classes.
REGULATORY FRAMEWORK:
The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Specifically, under the City’s zoning ordinance, a timeshare project is allowed only in zones where a hotel use would be permitted (i.e., R- 3, R -4, R -4VP, C -B-D, C -1, C -1AA and C -2 zones, and G -R-5 and R -2 zones when fronting on a major or secondary thoroughfare). So, timeshares are not permitted in single-family zones.
The City’s Zoning Ordinance defines a “timeshare” as follows:
“…a “time-share project” is one in which time-share rights or entitlement to use or occupy any real property or portion thereof has been divided as defined in Section 3.24.020(7) of the Palm Springs Municipal Code into twelve (12) or more time periods of such rights or entitlement.” (PSMC
93.23.11(A).)
Section 3.24.020(7), in turn, defines a timeshare, as
“occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonable or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time- share project which is involved has been divided. The said right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times.”
Item 3E - Page 7
Despite Pacaso’s assertions to the contrary, the City Attorney believes that Pacaso’s business model meets the City’s definition of a “timeshare”. The City’s definition is broad.
But, broken down, it appears to apply to Pacaso.
Specifically, Pacaso’s business model fits the following, streamlined, definition: “wherein a purchaser receives the right in perpetuity… or other extended term, to the recurrent, exclusive use or occupancy of a lot … annually or on some other … periodic basis, for a period of time that has been or will be allotted from the use or occupa ncy periods into which the time-share project which is involved has been divided.”
Here, purchasers of a Pacaso LLC receive the right, in perpetuity or some other period defined in the LLC agreement, to the recurrent and exclusive use of the lot on which the residence is located. The right to such use is on some periodic basis, for a period of time that is allotted under the LLC agreement.
While a single family residence, owned under an LLC, by up to eight owners may not be the type of time-share development that one often thinks of when they hear the term “time- share” (i.e., a Hyatt Residence Club or Hilton Grand Vacation Club), by its terms, the City’s ordinance applies to Pacaso’s business model.
Notably, because the properties are occupied by the owners of the LLC that owns the property, the City Attorney believes that the occupants would not qualify as “renters” and therefore the City’s vacation rental ordinance would not apply. This means that the strict regulations adopted by the City for vacation rentals (such as special noise regulations, limits on numbers of stays, significant fines for violations, etc.) do not currently apply to occupants of Pacaso properties.
In addition to regulating where time- shares can be located within the City, the Palm Springs Municipal Code (PSMC) also taxes the use of time-shares, although in a manner slightly differently than hotel s and vacation rentals. Specifically, the City has both a Transient Occupancy Tax (“TOT”) (PSMC Chapter 3.24) as well as a Time- Share Occupancy Tax (PSMC Chapter 3.28). The City’s TOT, imposed on short term hotel and vacation rentals, is set at 11½% of the nightly rent. (PSMC 3.24.030(a).) The City’s Time- Share Occupancy Tax is set at Four Dollars ($4.00) per night of occupancy.
OPTIONS:
City Staff is seeking policy direction from the City Council as to how the City Council would like to address business models such as proposed by Pacaso. Some options include:
• Maintain the City’s current prohibition on time- shares in single-family residential zones.
• Maintain the City’s current prohibition on time- shares in single-family residential zones, but update the City’s ordinances.
• Allow operations such as Pacaso’s, but subject them to a strict regulatory regime, similar to the City’s vacation rental ordinance.
Item 3E - Page 8
Option 1: Maintain the City’s current prohibition on time-shares
As discussed in the City’s December 6, 2022 letter to Pacaso, there are sever al policy reasons why the City Council might want to continue prohibiting business models such as Pacaso’s in single- family residential zones. Namely, Pacaso’s business model of purchasing properties, not as a primary residence, but instead exclusively for secondary, vacation occupancy, limits the number of homes that would be available for use primarily as a residence.
Given the aggressive, litigious approach taken by Pacaso in St. Helena, as between this Option and Option 2, below, the City Attorney and City staff would recommend Option 2.
Option 2: Maintain the City’s current prohibition on time-shares, but update the City’s ordinances
Other cities that have encountered Pacaso have chosen to update their ordinances. For instance, the City of St. Helena’s Planning Commission is scheduled to consider an update to its ordinance, which prohibits time- shares in residential zones, on March 1, 2022. ( https://sthelena.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=905 )
As part of that proposed ordinance, the City has extensively documented the policy basis for its prohibition, including protecting the residential character of neighborhoods, as well as the legal basis for doing so.
The City of Sonoma has adopted an urgency ordinance to prohibit time- shares in all zones, based on state law definitions (similar to St. Helena’s approach). It also makes advertising time-shares a municipal code violation. The City will also be following up with non-urgency ordinance.
The City of Hermosa Beach’s Planning Commission is scheduled to consider a similar ordinance on March 15.
Option 3: Allow operations such as Pacaso’s, but subject them to a strict regulatory regime, similar to the City’s vacation rental ordinance
As discussed above, this agenda item is not intended to address vacation rentals. And, vacation rentals in Palm Springs are allowed only as “ancillary and secondary” uses to the residential use of property, PSMC 5.25.020(a), whereas Pacaso properties are purchased and sold by Pacaso exclusively as temporary, secondary vacation homes.
Therefore, the two could, from a legal perspective, be treated differently. That said, from a neighbor’s perspective, the use and occupancy of a Pacaso home may not be significantly different from the use and occupancy of a vacation rental.
Therefore, should the Council, as a policy matter, wish to allow the use of properties such as Pacaso’s business model, it might be advisable to adopt similarly strict regulations, as has been done with vacation rentals.
Item 3E - Page 9
CEQA DETERMINATION:
This discussion and possible direction does not constitute a “project” under the California Environmental Quality Act (“CEQA”), as it is merely a discussion and possible research.
If any ordinance is brought forward, the City will analyze such ordinance, in accordance with CEQA.
FISCAL IMPACTS:
Assuming a Pacaso property pays its Time- Share Occupancy Tax for every day of the year, the revenue to the City would be fairly minimal, at $1,460 per year, per property.
Pacaso asserts that its business model positively impacts local businesses and the City.
However, the City has seen no evidence of that, in the form of economic studies or analyses.
CONCLUSION:
Therefore, City staff and the City Attorney request that the City Council provide policy direction with regard to whether and how to address business models such as Pacaso’s.
REVIEWED BY:
City Attorney: Jeffrey S. Ballinger
City Manager: Justin Clifton
ATTACHMENTS:
1. City Attorney Letter to Pacaso, dated December 6, 2021.
2. Pacaso Response Letter dated February 10, 2022.
Item 3E - Page 10
55575.18100\34590098.1
Indian Wells
(760) 568-2611
Irvine
(949) 263-2600
Los Angeles
(213) 617-8100
Manhattan Beach
(310) 643-8448
Ontario
(909) 989-8584
655 West Broadway, 15th Floor, San Diego, CA 92101
Phone: (619) 525-1300 | Fax: (619) 233-6118 | www.bbklaw.com Riverside
(951) 686-1450
Sacramento
(916) 325-4000
San Diego
(619) 525-1300
Walnut Creek
(925) 977-3300
Washington, DC
(202) 785-0600
Jeffrey S. Ballinger
(619) 525-1343
[email protected]
December 6, 2021
VIA E-MAIL [email protected]
Ellen Haberle
Director, Government & Industry Relations
Pacaso.com
2021 Fillmore St. Suite 183
San Francisco, CA 94115
Re: Pacaso’s Operations within the City of Palm Springs, California Dear Ms. Haberle:
As you know, this law firm serves as City Attorney for the City of Palm Springs, California.
In that capacity, we are writing to advise Pacaso.com that Pacaso’s current operations within the City are unlawful and must cease immediately.
While I appreciate your recent efforts to meet with City officials and present Pacaso’s position as to why the City’s timeshare ordinance does not apply to Pacaso, as set forth more fully below, such a position it not legally tenable.
Pacaso is a company that holds itself out as a new way to own a second home. According to Pacaso’s website (https://www.pacaso.com/learn
), accessed earlier this year, Pacaso operates as
follows:
“Co-ownership with Pacaso is the best way to buy and own a great second home.
From buying to closing here’s how Pacaso works. First, tell us a little about yourself and what you are looking for in a second home. Then, start shopping. If a listing currently on Pacaso is not a fit, find one you love on any real estate site and share it with us. If the home is a match for Pacaso, we will partner with you to purchase up to half of the property in a private and professionally managed LLC uniquely designed for co-ownership. This LLC is referred to as the Pacaso Home LLC. On behalf of Pacaso, we line up financing for the LLC and close quickly. In parallel Pacaso remarkets remaining ownerships shares in the home to interested buyers. Buyers can purchase their desired amount of ownership from one-eighth Item 3E - Page 11
BEST BEST & KRIEGER ~
ATT OR NEYS AT L A W
55575.18100\34590098.1
VIA E-MAIL [email protected]
Ellen Habe
rle
December 6, 2021
to one-half of the whole home. We enable qualified buyers to access funds in the LLC and finance up to half of their purchase. The financing relationship is directly between the LLC and the buyer. Pacaso signs closing paperwork on behalf of the LLC. In parallel buyer signs the LLC owner operating agreement to complete their purchase. Ownership is recorded in the owner’s schedule section of the owner operating agreement. Following closing the collective owners own 100% ownership interest in the LLC. We transform the home with modern interior design and address any necessary repairs. Owners use the mobile app to book stays 2 days to 24 months in advance. Scheduling is easy and equitable based on the number of shares owned. From there we take care of everything, overseeing local property management, bill pay and platform technology, all from the mobile app. Owners simply show up, relax and enjoy their Pacaso.”
The maximum length of a stay is based on shares owned. Owners of one share can enjoy a stay anywhere from 2 to 14 nights. A stay with a duration of 2-7 nights counts as one general stay, while a stay with a duration of 8-14 nights counts as 2 general stays. Owners of two shares have the option to book stays up to 28 nights.
Pacaso asserts that the properties that they sell and manage are not timeshares. According to Pacaso, a Pacaso home is no different from any other single family residence. Pacaso further asserts that Pacaso co-owners agree to several restrictions to help ensure that their use promotes the public interest, safety and comfort. For example, Pacaso states that there is a maximum of eight co-owners for any home, with only one family using the property at a time; co-owners are prohibited from having large events or parties that exceed the maximum occupancy of the home; co-owners must adhere to a 9pm to 7am quiet hour policy; co-owners are prohibited from renting the home; and Pacaso encouraged homeowners to avoid parking on the street unless absolutely necessary. However, Pacaso does not provide any documentation or explanation of how these rules are enforced. The stays are reserved on an app, and while each co-owner is prohibited from renting the home as a short-term rental, they are permitted to allow other guests to stay there during their allotted days.
According to Pacaso, as of September, one single-family residence within Palm Springs has been fully sold, and Pacaso was marketing four others within the City.
City of Palm Springs Timeshare Ordinance
The City of Palm Springs regulates where timeshares can be located within the City and taxes occupancy of timeshares. Specifically, under the City’s zoning ordinance, a timeshare Item 3E - Page 12
BEST BEST & KRIEGER ~
ATT OR NEYS AT LAW
55575.18100\34590098.1
VIA E-MAIL [email protected]
Ellen Habe
rle
December 6, 2021
project is allowed only in those zoning districts where a hotel use would be permitted (i.e., R-3, R-4, R-4VP, C-B-D, C-1, C-1AA and C-2 zones, and G-R-5 and R-2 zones when fronting on a major or secondary thoroughfare). (Palm Springs Zoning Code, § 93.23.11(B).) Indeed, such uses are not allowed by right, but instead require a conditional use permit. Notably, timeshares are not permitted in single-family zones.
The City’s Zoning Ordinance defines a “timeshare” as follows:
“…a “time-share project” is one in which time-share rights or entitlement to use or occupy
any real property or portion thereof has been divided as defined in Section 3.24.020(7) of the Palm Springs Municipal Code into twelve (12) or more time periods of such rights or entitlement.” (PSZC, § 93.23.11(A).) Section 3.24.020(7) defines timeshares, for purposes of taxation. It defines a “timeshare” as
“occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonable or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The said right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times.”
Despite Pacaso’s assertions to the contrary, Pacaso’s business model meets the City’s Ordinance’s definition of a “timeshare”. The City’s definition, broken down into its constituent parts, applies to Pacaso.
Specifically, Pacaso’s business model fits the following definition: “wherein a purchaser receives the right in perpetuity… or other extended term, to the recurrent, exclusive use or occupancy of a lot … annually or on some other … periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided.”
Here, purchasers of a Pacaso LLC receive the right, in perpetuity or some other period defined in the LLC agreement, to the recurrent and exclusive use of the lot on which the residence Item 3E - Page 13
BEST BEST & KRIEGER ~
ATT OR NEYS AT LAW
55575.18100\34590098.1
VIA E-MAIL [email protected]
Ellen Habe
rle
December 6, 2021
is located. The right to such use is on some periodic basis, for a period of time that is allotted under the LLC agreement.
Thus, by its terms, the City’s ordinance applies to a use such as Pacaso’s. As such, Pacaso’s operations are not permitted in single family-zones within the City of Palm Springs, California.
In addition to the City’s Zoning Ordinance, the City’s business license ordinance requires any party that is transacting any business within the City to first procure a business license and pay the applicable business license tax. (Palm Springs Municipal Code, § 3.48.010.) Pacaso does not possess a City business license, nor has it paid any business license tax to the City. As a result, Pacaso’s operations within the City also are in conflict with the City’s business license ordinance.
Finally, several significant policy reasons justify the City’s prohibition against timeshares in single-family zones. As the City’s Housing Element of the General Plan states,
“Palm Springs considers housing affordability to be a critical issue. The inability to afford housing leads to a number of undesirable situations, including the doubling up of families in a single home, overextension of a household’s financial resources, premature deterioration of housing due to the high number of occupants, situations where children and seniors cannot afford to live near other family members because of the lack of affordable housing options, and in more extreme cases, homelessness.” (City of Palm Springs General Plan, Housing Element, p. 3-19, (2014-2019).)
For every house that Pacaso sells to one of its limited liability corporations, to be used as a second, vacation home, that house becomes unavailable to a buyer or renter who could live there full time. This necessarily reduces the amount of housing stock that is available for full time residents in the City. The reduction in housing stock, in turn, feeds the affordability crisis, making the remaining houses within the City more costly.
Pacaso may claim that it only purchases and sells “luxury” homes, and therefore does not impact the availability of affordable housing. However, basic laws of supply and demand dictate that every home that is made unavailable to a full time resident, whether “luxury” or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City.
One of the policies of the City’s Housing Elements is to “protect established single-family residential neighborhoods from the transition, intensification, and encroachment of uses that Item 3E - Page 14
BEST BEST & KRIEGER ~
ATT OR NEYS AT LAW
55575.18100\34590098.1
VIA E-MAIL [email protected]
Ellen Habe
rle
December 6, 2021
detract and/or change the character of the neighborhood.” (Housing Element, HS1.8, p. 3-63.) Pacaso portrays its business model as “the modern way to buy and own a second home”. However, Pacaso’s “modern way” involves up to eight (8) investors and their guests rotating occupancy throughout the year. Although the LLC investors are not technically “renters”, neighbors can expect the property to have many of the secondary impacts of vacation rentals, which are currently prohibited in many Coachella Valley cities and heavily regulated in Palm Springs. For example, house cleaners will have to come to the home in between each stay, and the home can turn over multiple times in a week. To a neighbor, that impact is very much the same as if the occupants were short-term vacation renters. In addition, the “co-owners” of the limited liability company really have no connection with one another, other than their investment in the company. All of this necessarily changes the character of a neighborhood, in contravention of the City’s stated policy of preserving the single-family residential character of its neighborhoods.
Another Housing Element policy is to “preserve the supply of affordable rental housing in the community, including mobile home parks, publicly subsidized rental housing, and special needs housing.” (Housing Element, HS2.9, p. 3-68.) As stated above, Pacaso’s business model removes single-family homes from the housing market for individuals or families who wish to reside in Palm Springs and therefore reduces the supply of affordable rental housing for those individuals or families.
Therefore, Pacaso’s current operations within the City are unlawful and must cease immediately.
Should you have any questions, please do not hesitate to contact me.
Sincerely,
Jeffrey S. Ballinger
of BEST BEST & KRIEGER LLP
City Attorney
City of Palm Springs
Item 3E - Page 15
BEST BEST & KRIEGER ~
ATT OR NEYS AT LAW
55575.18100\34590098.1
VIA E-MAIL [email protected]
Ellen Habe
rle
December 6, 2021
cc: Hon. Mayor and Councilmembers
Justin Clifton, City Manager
Teresa Gallavan, Asst. City Manager
Flinn Fagg, Development Services Director
Item 3E - Page 16
BEST BEST & KRIEGER ~
ATT OR NEYS AT LAW
January 21, 2022
VIA EMAIL
Jeff Ballinger, Esq.
City Attorney, City of Palm Springs
[email protected]
Re: City of Palm Springs’ Correspondence of Dec. 6, 2021, and Pacaso’s Operations within the City of Palm Springs, California
Dear Mr. Ballinger:
As you know, our office has been retained to represent Pacaso in connection with the City of Palm Springs’ (the “City”) correspondence of December 6, 2021.
In its December 6th correspondence, the City demanded that Pacaso cease its current operations in the City. In that regard, the City identified three (3) points of concern with Pacaso’s operations within the City: (1) that Pacaso’s operations violate the City’s time share ordinances (Palm Springs Municipal Code § 93.23.11(A)); (2) Pacaso had not obtained a business license to pay the applicable business license tax (Palm Springs Municipal Code, § 3.48.010); and (3) Pacaso’s business model is incongruent with components of the City’s General Plan, i.e., the Housing Element since it negatively impacts the supply of affordable housing in the City and because Pacaso’s model “looks like” short term vacation rentals.
We will address the above three (3) concerns in the order you addressed them. The City provided the lengthiest analysis to the last of the City’s concerns, i.e., alleged violation of the City’s Housing Element policy. In our telephone conversation regarding the City’s letter, you confirmed that issue was indeed the City’s chief concern with Pacaso’s operations in the City. Before we discuss the City’s concerns, we have provided a little more background into Pacaso and its operations.
Background and Pacaso’s Business Model
The COVID-19 pandemic has fundamentally shifted the housing market in the United States and changed demand for second homes. An analysis from Redfin found that as of November 2021, demand for second homes was 83% above pre -pandemic levels. Reflecting low mortgage rates and corporate shifts towards permanent remote work policies, more people are choosing to relocate to second home destinations or buy second homes there.
Item 3E - Page 17
Operating in this changed environment, Pacaso seeks to provide se cond home buyers a better option than a moderately -priced whole second home. By facilitating co -ownership, Pacaso empowers buyers to up level their focus toward luxury properties and away from lower price points, benefitting buyers and reducing competition for homes needed by those who live and work in Palm Springs full-time.
Pacaso’s approach also lowers the barriers to second home ownership by simplifying the process, which opens the door to greater diversity. Second home ownership has traditionally, been accessible only for elite and predominantly white buyers. In contrast, Pacaso’s owner group is organically diverse; as of June 2021, 30% of Pacaso’s clients were non-white or identif ied as LGBTQ+. Pacaso organizes the owne rship group, manages the legal process, and provides a property management service to streamline the home ownership experience for the co-owners. The concept of co-ownership through an LLC is not new; but Pacaso’s simplification of the process in a way that makes the experience accessible to people from traditionally underrepresented communities.
Pacaso and its diverse clientele provide the City with an opportunity to be a partner, to embrace homeowners who are invested in the local community for the long-term, and to enrich and diversify the City’s community. We believe then that rather than be opposed to this model that the City should embrace the opportunity that Pacaso’s business model provides to better utilize the housing stock and support broader homeownership opportunities in the City.
We will now analyze the three (3) points that the City raised in its December 6th letter.
Analysis
(1) Pacaso’s Operations Do Not Violate the City’s Time Share Ordinances.
As set forth herein, the City’s attempt to challenge Pacaso under the City’s time share ordinance is flawed for several reasons. Despite the City’s assertions to the contrary, Pacaso’s business model does not meet the City’s Ordinance’s definition of a “time share”.
The City’s Zoning Ordinance defines a “time share” as follows:
…a “time-share project” is one in which time-share rights or entitlement to use or occupy any real property or portion thereof has been divided as defined in Section
3.24.020(7) of the Palm Springs Municipal Code into twelve (12) or more time periods of such rights or entitlement.” (PSZC, § 93.23.11(A).)
Palm Springs Municipal Code Section 3.24.020(7) defines “time share occupancy” as follows:
. . . occupancy related to the situation wherein a purchaser receives the right or entitlement in perpetuity, for life, or for a term of years or other extended term, to the recurrent, exclusive use or occupancy of a lot, parcel, unit, room(s), hotel or portion thereof, or segment of real property, annually or on some other seasonable Item 3E - Page 18
or periodic basis, for a period of time that has been or will be allotted from the use or occupancy periods into which the time-share project which is involved has been divided. The said right or entitlement to occupancy may attach in advance to a specific lot, parcel, unit, room(s), or portion of a hotel, or segment of real property, or may involve designation or selection of the same at a future time or times.
A plain reading of the City’s time s hare ordinances makes clear that Sections 93.23.11(A) and
3.24.020(7) do not apply to Pacaso.
Pacaso’s small co -ownership model of single -family homes is starkly different from any “time share” project purportedly covered by Section 93.23.11(A). Pacaso c reates a property -specific LLC for each home, which owns deeded title to the property. Then Pacaso organizes and vets a maximum of eight co-owners, which have ownership interests in the LLC and co -own the home in increments, typically ranging from 12.5% to 50%. The co -owners can purchase their desired ownership interest based on their expected occupancy needs, financial means, and even in certain circumstances their desire to participate in the LLC with co-owners of their choosing. At closing, the co -owners enjoy 100% ownership in the property, and Pacaso’s only role remains as property manager.
On its face, the City’s ordinance does not apply to Pacaso. The ordinance only applies to entitlement to use or occupy any real property or portion thereof has been divided into twelve (12) or more time periods of such rights or entitlement. As pointed out above, Pacaso’s model does not divide the real property into time periods and title to the home is vested in the LLC which is owned by a maximum of eight co-owners.
Moreover, and more fundamentally, the application of the City’s time share ordinance to Pacaso is misplaced since its model does not involve “time shares.” A “time share project” only applies to the “recurrent, exclusive use, right to use or occupancy” of certain property. This is starkly different from the rights inherent to real property ownersh ip, including possession, control, exclusion, and disposition. Pacaso homeowners have more than merely the right to “exclusive use” or to “occupy” a property. Just like any other residential homeowner, Pacaso homeowners own a real property asset in a singl e-family home that includes real property interests, rights and obligations, such as the right to possession, to control, to use and quiet enjoyment, to privacy and to exclude others, to sell the property, to make improvements or refurbish the property, etc.
The City’s time share ban only applies to “projects” that have been “divided” into “use or occupancy periods,” such as the occupancy of a “ segment of real property annually or on some other seasonal or periodic basis .” Section 3.24.020(7) and Section 93.23.11(A). (Emphasis added). Although these Municipal Code sections are too ambiguous and vague to understand, it is nonetheless clear that it imposes a structure that differs from co -ownership of a residential single-family dwelling as employed in Pacaso’s model.
The misapplication of the City’s time share ordinance to Pacaso is further confirmed by the definition of a “time share,” which omits any reference to properties used for residential, non- Item 3E - Page 19
----
transient, non-commercial purposes. Section 3.24.020(7). The City’s definition of a “time share” only applies to a “lot, parcel, unit room(s), hotel or portion thereof, or segment of real property annually or on some other seasonal or periodic basis”—all of which (to the extent they are defined in the Section) are commercial in nature and/or intended for a transient use.
A Pacaso home clearly falls outside the definition of a “time share project” under its plain meaning, and by no stretch of the imagination qualifies as a hotel, condominium, or commercial p roperty that the City’s ordinance aims to ban. Pacaso is a purely residential co -homeownership structure that lacks any resemblance to a commercial or transient -like use. A co -owner of a Pacaso home is not a renter, an investor, or a transient occupant. A co-owner of a Pacaso home is an “acquiring owner” with ownership interest in the property. Co -owners are jointly committed to the principle that the relaxed enjoyment of the Pacaso home is one of their foremost objectives. This ownership structure facilit ates a collaborative ownership experience with diverse individuals of their choosing.
Plainly, Pacaso’s homeowners do not merely own the “right or entitlement to occupancy,” or “the recurrent, exclusive use, right to use or occupancy” of a property “for a period of time that has been or will be allotted from the use or occupancy periods into which the time share program which is involved has been divided.” 3.24.020(7). Nor do Pacaso homeowners own the right to occupy only a “ segment of real property annually or on some other seasonal or periodic basis .” Id. (emphasis added). Rather, Pacaso homeowners own a real property asset in a single -family home that includes real property interests, and rights and obligations shared among co-owners.
Several other f actors differentiate Pacaso homeowners from time share participants. Pacaso homeowners together have control of their home and are involved in decision -making regarding the property. They vote on matters such as selecting and replacing the program manage r, renovations on the home or other changes to the interior or exterior design, and various other fundamental homeownership matters. Co-owners can even sell the home outright. Pacaso is merely a service. .
Pacaso supports o wners as a program manager, making their ownership experience seamless through LLC and property management services, interior design, scheduling service, and concierge services.
Co-owners are not purchasing intervals of time (not on an “annual” or “seaso nal” basis, or otherwise). Nor are co-owners purchasing the right to occupy only a “segment” of the home for a certain period of time. Co-owners’ ability to schedule time in the home is fluid and flexible.
Pacaso homeowners are long-term oriented (like most homeowners) and have materially different incentives with respect to their conduct, use and treatment of the home as compared to short-term renters. This is because Pacaso homeowners are directly invested in the home, its surrounding neighborhood and community, and the long-term maintenance of the property and community at large. Pacaso owners are true homeowners in it for the long -haul. They own for their personal use and enjoyment, not for profit. They can sell their interest at any point after the first year of Item 3E - Page 20
ownership by listing the property on the MLS with a local real estate agent, and they are strictly prohibited from renting out the property at any point to anyone.
In contrast, a time share typically entails merely the right to use a f ixed amount of time in a property. It is highly restrictive in terms of resell ability, pricing and control. Time share interests are usually held in multi-unit buildings or resort properties and use of the property is typically split across a large number of investors. Owners of a time share interest are unlikely to have any meaningful interactions with their neighbors, other time share participants, or other members of the community. Behaviorally (and due to the nature of the properties, the structure of time share ownership, and nature of the investment), time share owners resemble short -term renters or hotel guests.
For all these reasons, it is clear that Pacaso’s properties do not fall within the purview of the City’s time share ban.
(2) Pacaso Had Not Obtained a Business License to Pay the Applicable Business License Tax Since It Not Operating a Business.
The City asserts that its business license ordinance requires any party, including Pacaso, that is transacting any business within the City to first procure a business license and pay the applicable business license tax. (Palm Springs Municipal Code, § 3.48.010.)
Pacaso is not required to obtain a business license in the City. The application of the above ordinance only is imposed upon the businesses, trades, professions, callings and occupations specified in Chapters 3.40 through 3.96 of the Palm Springs Municipal Code. A review of the ordinances in Chapters 3.40 through 3.96 of the Palm Springs Municipal Code do not provide for application of those provisions to Pacaso. For example, Palm Springs Municipal Code Section
3.44.020, defines “Business” as follows:
“Business” includes professions, trades, and occupations and all and every kind of calling whether or not carried on for profit. ( Ord. 908 § 2, 1971: prior code § 2101(a))
That definition does not apply to Pacaso nor would it apply to any entity that purchased residential property in the City for its own use. The only function that Pacaso serves is to support owners as a program ma nager and possible property management services. If Pacaso homeowners collectively agree that Pacaso’s services are no longer desired, the owners that own their interest in full, can choose to terminate their relationship with Pacaso and self -manage their property.
Pacaso does not agree, then, that under its model it is required to obtain a business license in the City.
(3) Pacaso’s Business Model Does Not Negatively Impacts the Supply of Affordable Housing in the City, Rather, it Positively Impacts that Supply.
Item 3E - Page 21
Finally, the City asserts that Pacaso’s business model violates components of the City’s General Plan, i.e., the Housing Element, since it negatively impacts the supply of affordable housing in the City and its model “looks like” and operates like short term vacation rentals.
The City basis its assertion that Pacaso’s business model negatively impacts the City’s pool of affordable housing on its view of the laws of supply and demand, i.e., that for every home that is made unavailable to a full-time resident, whether “luxury” or not, necessarily reduces the supply of homes, and therefore reduces the affordability of housing in the City. This understanding of Pacaso’s business model is far too simplistic. Pacaso not only disagrees with this assertion it maintains that its model actually increases the supply of accessible housing in the City.
First, the homes targeted by Pacaso are not what anyone would be deemed to be pulled from the City’s pool of affordable or accessible housing. Pacaso targets homes that are typically between 2-4X the local median value, but in some cases more. In the City, Pacaso serves five (5) homes, which had an average purchase price of $2.9M and a range of $1.75M-$5.2M. In comparison, the median home value in Palm Springs was $614,194 as of November 2021. Pacaso also does not overbid for homes. The housing market is extremely competitive and Pacaso is often outbid on homes.
Pacaso’s overall involvement in the City’s housing market is small as well. In 2021, there were 2,270 homes sold in the City. Pacaso purchased only five (5) of those houses or 0.2% of total.
Second, Pacaso helps second home buyers “up level” their purchase which means that they aren’t pulling from the City’s pool of affordable or accessible housing. Today, a typical second homeowner uses their home 5-6 weeks out of the year. The rest of the time, these homes either sit empty or rented short term. This traditional approach is an inefficient utilization of the housing stock that reduces moderately-priced housing available to those who live and work in the community full time.
In contrast, Pacaso empowers second home buyers to redirect their focus towards luxury homes and away from homes at lower price points needed by the local workforce. Rather than 8 families competing at lower price points, Pacaso consolidates these families into a single luxury home instead. In other words, whereas eight (8) separate purchases may have purchased second homes for themselves they are now only purchase one home. Rather that negatively impacting the law of supply and demand for affordable housing then, Pacaso’s model positively impacts that supply.
Pacaso is proud to make second home ownership more accessible and enjoyable. By facilitating co-ownership, Pacaso lowers the barriers for all buyers, including traditionally underrepresented groups. As pointed out above, as much as 30% of Pacaso’s clients were non-white or identified as LGBTQ+.
The City has also identified another one of the policies o f the City’s Housing Elements that it believes Pacaso’s model violates, i.e., to “protect established single -family residential neighborhoods from the transition, intensification, and encroachment of uses that detract and/or Item 3E - Page 22
change the character of the neighborhood.” (Housing Element, HS1.8, p. 3-63.) The City believes that Pacaso’s business model essentially will “look like” a vacation rental to neighbors of a Pacaso property. The City, then, argues that there is very little difference from a vacation re ntal and a Pacaso property. This argument is wrong on a number of counts.
First, as pointed out above, Pacaso’s model consolidates second home buyers into one dwelling.
Thus, rather than eight (8) families owning second homes, lightly occupied, they together own only one. This is important since those same eight (8) families not only may have purchased moderately-priced housing but they would have been more than likely to have rented those same dwellings out on a short -term basis when not using it. Pacaso’s business model eliminates those eight (8) other homes from the short-term rental market.
Second, nothing about the City’s stated Housing Element goals is at odds with Pacaso. Pacaso is a purely residential co-homeownership structure that resembles, in structure and in use, any other residential home (whether co -owned or not). For this reason, for example, to the extent the City seeks to “prevent undue concentration of population” or “promote the public interest, health, comfort, convenience, safety and general welfare,” there is no rational basis between the City’s stated goals and targeting Pacaso. A Pacaso home is no different from any other single -family residence. Pacaso’s homes are subject to the same residential occupancy rules as other homes, and homeowners respect the same rules that other owners are expected to follow. Pacaso co -owners agree to several additional restrictions that ensure their use promote s public interest, safety and comfort. For example, there is a maximum of eight co-owners for any home, with only one family using the property at a time; co -owners are prohibited from having large events or parties that exceed the maximum occupancy for the Pacaso home; co-owners adhere to a 9 p.m. to 7 a.m. quiet hour policy; co-owners are prohibited from renting the home; and Pacaso encourages homeowners to avoid parking on the street unless absolutely necessary, etc. In sum, Pacaso homeowners are no different from other homeowners in the City, thus, efforts to preclude their homeownership does nothing to advance the “convenience, safety and general welfare” of the citizens of the City.
Pacaso takes neighbor relations seriously and has policies in place that reflect our commitment.
All owners agree to Pacaso’s Code of Conduct, which prohibits rental of the home for any length of time, large parties or events that would disrupt the neighbors, among others. If Pacaso learns that the policies have been violated, the company takes action and has the right to suspend owner stay rights. Below is a schedule of enforcement actions should policies be violated. ● After one (1) such policy violation in any eighteen (18) month period, Pacaso may deliver a written warning.
● After two (2) such policy violations in any eighteen (18) month period, Pacaso may deliver a subsequent written warning and/or suspend owner stay rights for up to one (1) month.
● After three (3) such policy violations in any eighteen (18) month period, Pacaso may suspend owner stay rights for up to three (3) months.
● After four (4) such policy violations in any eighteen (18) month period, Pacaso may suspend owner stay rights for up to four (4) months.
Item 3E - Page 23
● After any subsequent policy violations in any eighteen (18) month period, Pacaso may suspend owner stay rights for up to four (4) additional months.
Pacaso has the potential to be an excellent partner of the City and local businesses. Pacaso’s new homeowners are part and parcel of the underlying economic ecosystem. Unlike absentee second homeowners, Pacaso owners occupy their home and support local businesses year -round, including those disproportionately impacted by COVID -19, such as restaurants and retail shops.
Therefore, Pacaso’s business model should positively impact not only the coffers of local business but that of the City’s. Additionally, Pacaso itself employs on average between 8 -10 local businesses per property, including real estate agents, property managers, landscapers, pool cleaners, home cleaners, laundry services, handymen, local artists, and more.
As a demonstration of how Pacaso is working in the real world, Pacaso now operates in more than 30 markets across the United States. Most local leaders have acknowledged that co- ownership is a common practice and property right, and none have implemented regulations that target co-ownership.
Conclusion
Pacaso’s business model will provide second homes to a diverse clientele base who will be homeowners who are invested in the local community for the long-term. These homeowners will both enrich and diversify the City’s community. Additionally, because Pacaso’s mo del will concentrate would-be second homeowners into upper scale residential housing, the City’s pool of affordable or accessible housing is not negatively impacted but is, rather, positively impacted. We believe the City of Palm Springs should embrace the opportunity that Pacaso’s business model provides and we invite a response by the City confirming that it will abandon its challenge to Pacaso’s operations in the City. Pacaso believes strongly in its mission to enrich lives by making second home ownership possible for more people and will pursue all necessary courses of action to defend the rights of the homeowners Pacaso serves.
Sincerely,
SBEMP LLP
Bruce T. Bauer, Esq.
cc: Justin Clifton, City of Palm Springs City Manager
[email protected]
Item 3E - Page 24
DRAFT
DRAFT ORDINANCE - 6.30.22
Regulation of Co-ownership Property
Management
Definitions -
“Authorized Guests” means any guests of an owner of a Co-owned Housing Unit who have not provided compensation to an owner for dwelling, lodging, and sleeping purposes and are present in the Co-owned Housing unit while the owner is on-site and in the home.
“Co-owned Housing Unit” means a residential dwelling unit, managed by a Co-owned Property Manager, and utilized for occupancy for dwelling, lodging, or sleeping purposes by up to ten owners or ten members of a Limited Liability Company that owns the dwelling unit, along with authorized guests. The term “Co-owned Housing Unit ” is not a time-share project, as defined in [INSERT APPROPRIATE SECTION OF MUNICIPAL CODE], and usage of a Co-owned Housing Unit is not a time-share use. “Co-owned Property Manager” means a person, corporation, trust, or entity that manages a Co-owned Housing Unit, including providing cleaning services and maintenance of the co-owned housing unit, on behalf of the owners of the Co-Owned Housing Unit. The term Co-owned Property Manager does not include software used by the owners of a Co-owned Housing Unit to self-manage the co-owned housing unit. “Co-owned Property Management Registration Certificate” or “Registration Certificate” means the annual permit and/or a registration for a “Co-owned Property Manager.” “Co-owned Housing Unit Permit” means a permit granted to a Co-owned Property Manager for each Co-owned Housing Unit under management. “Good Neighbor Policy” is a policy that governs the operation of a Co-owned Housing Unit that summarizes general rules of conduct, occupancy limits, consideration, and respect, including without limitation provisions of the [INSERT NAME OF CITY] Municipal Code applicable to or expected of guests to the City. “Local contact person” means an individual who is available twenty-four hours per day, seven days per week for the purpose of responding within thirty (30) minutes to complaints regarding the condition, operation, or conduct of occupants of the Co-owned Housing unit, or any agent of an owner authorized by the owner to take remedial action and who responds to any violation of this code.
Item 3E - Page 25
DRAFT
“Usage Block” means the length of time, measured in consecutive days, that each owner of a Co-owned Housing Unit dwells in their unit.
Co-owned Property Management Registration Certificate Required (a) A Co-owned Property Manager shall not manage a Co-owned Housing Unit without obtaining a Co-owned Property Management Registration Certificate from the City. A Co-owned Property Manager shall obtain a Registration Certificate by submitting an application form signed by the applicant under penalty of perjury to the [INSERT APPROPRIATE DEPARTMENT]. Each application shall contain the following information:
(i) The name, address, and telephone number of the applicant; (ii) The name, address, and telephone number of the local contact for the Co-owned Property Manager;
(iii) A current list of every property that the applicant manages in the City; (iv) A copy of the Good Neighbor Policy that governs each Co-owned Housing Unit managed by the applicant which must contain the following requirements:
(1) Noise: occupants of the Co-owned Housing Unit shall comply with all provisions of the City’s Noise Ordinance [INSERT
APPROPRIATE SECTION OF MUNICIPAL CODE].
(2) Parking: occupants of the Co-owned Housing Unit shall comply with all provisions of the City’s parking regulations applicable to residential units.
(3) Trash: Trash and refuse shall not be left stored within public view, except in proper containers for the purpose of collection by the collectors and between the hours of five a.m. and eight p.m. on scheduled trash collection days.
(4) Occupancy Limits: the maximum number of occupants shall be no more than two (2) persons per bedroom within the Co-owned Housing Unit plus any minor children, age 12 or under.
(5) Home Repairs & Maintenance: all home repairs (external and internal), garden and yard maintenance, and pool cleaning and maintenance shall not be performed between the hours of 5:00 pm on Friday through 8:00 am on Monday, except in the case of an emergency or the occurrence of an unexpected event that reasonable warrants a timely or immediate response.
Item 3E - Page 26
DRAFT
(v) Evidence of a valid business license issued by the City for the separate business of operating Co-owned Housing Units or submission of a certificate indicating that the Owner is exempt or otherwise not covered by the City’s Business Tax Ordinance [INSERT APPROPRIATE SECTION OF MUNICIPAL CODE] for such activity.
(b) After receipt of a Registration Certificate, a Co-owned Property Manager may apply for additional Co-owned Housing Unit permits to be associated with its Registration Certificate.
(c) The Registration certificate shall be renewed annually pursuant to procedures provided by the [INSERT APPROPRIATE DEPARTMENT].
(d) Fees for a Registration Certificate will be established by resolution of the City Council.
Co-owned Housing Unit Permit Required
(a) A Co-owned Property Manager shall obtain a permit for each Co-owned Housing Unit in the City prior to the dwelling’s use as a Co-owned Housing Unit. (b) The City shall not issue a Co-owned Housing Unit Permit for a residential property unless the property has a recorded purchase price greater than two times of the then median housing price measured at the time of the purchase of the property. The Office of Special Programs Compliance shall have the authority to establish administrative rules and regulations regarding the calculation of the median housing price for purposes of this section.
(c) Prior to receipt of a Co-owned Housing Unit Permit, a Co-owned Property Manager shall submit an affidavit that the Co-owned Housing Unit has adopted a Good Neighbor Policy and a copy of the Good Neighbor Policy shall be submitted along with the Co-owned Housing Unit Permit.
(d) The City shall not issue more than one Co-owned Housing Unit Permit per block.
For the purpose of this section, block means one side of a street between two consecutive intersecting streets. The City shall waive this density restriction if the applicant furnishes a development agreement or letter from a Homeowners Association endorsing such waiver.
(e) The City shall not issue a Co-owned Housing Unit Permit for a residential property unless the owner obtains and shall at all times maintain the following insurance coverage: (i) a policy of fire and casualty insurance covering the Item 3E - Page 27
DRAFT
property and personal property in the Co-owned Housing Unit in an amount equal to the full replacement value of the property and the estimated value of the personal property in the Co-owned Housing Unit; and (ii) a policy of general liability insurance that include liabilities arising from usage of the Co-owned housing Unit by all owners and authorized guests, with limits of liability not less than $2,000,000.
(f) The Co-owned Property Manager shall obtain a Co-owned Housing Unit Permit by submitting an application form signed by the applicant under penalty of perjury to the [INSERT APPROPRIATE DEPARTMENT]. Each application shall contain the following information:
(i) The address of the Co-owned Housing Unit;
(ii) The name, address, and telephone number of the applicant; (iii) The name, address, and telephone number of the local contact for the Co-owned Housing Unit;
(iv) Documentation showing the recorded purchase price of the Co-owned Housing Unit was greater than two times the median housing price at the time of the purchase.
(v) A copy of the Good Neighbor Policy that governs the operation of the Co-owned Housing Unit;
(vi) Documentation demonstrating that the Co-owned Housing Unit has the insurance coverage required by subsection (d).
(vii) If applicable, evidence that a Co-owned Housing Unit would not violate the permissible use for housing within a Homeowners Association in accordance with the Homeowners Association’s Declaration of Covenants, Conditions, and Restrictions.
(g) The Co-owned Housing Unit Permit shall be renewed annually pursuant to procedures provided by the [INSERT APPROPRIATE DEPARTMENT] (h) The [INSERT APPROPRIATE DEPARTMENT] shall process applications for Co-owned Housing Unit permits in the order in which they are received by the department and shall issue permits no later than 5 business days after receiving an application.
(i) Fees for a Co-owned Housing Unit Permit will be established by resolution of the City Council and shall not exceed $5,000.
Prohibited activities
(a) No Co-owned Housing Unit should be used as Vacation Rental or for Homesharing.
Item 3E - Page 28
DRAFT
(b) No weddings or commercial events shall be hosted in a Co-owned Housing Unit. (c) Guests of Co-owned Housing Unit shall park all vehicles on the property except for vehicles parked for less than one hour or commercial vehicles conducting maintenance, landscaping, or deliveries.
(d) Any radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or any machine or device for the producing or reproducing of any sound shall be conducted within a fully enclosed Co-owned Housing Unit and shall not be audible at the property line of the Co-owned Housing Unit.
(e) No Co-owned Housing Unit shall be used by guests without a co-owner present.
Violations
(a) Any person who violates a provision of this Chapter is subject to criminal sanctions and administrative penalties pursuant to [INSERT APPROPRIATE CHAPTERS] of this Code and the specific penalties as provided in this Chapter.
Any person who uses, or allows the use of, residential property in violation of the provisions in this Chapter is guilty of a misdemeanor for each day in which such residential property is used, or allowed to be used, in violation of this Chapter. An administrative citation issued pursuant to [INSERT APPROPRIATE CHAPTERS] for a first violation shall be five hundred dollars ($500.00) and each subsequent violation shall be one thousand ($1,000.00) dollars. Each administrative citation for a violation of any provision of this Chapter shall be levied or assessed against the Co-Owner who is occupying the Co-owned Housing Unit and any entity that owns the Co-owned Housing Unit.
(b) Any Co-owned Property Manager who manages a Co-owned Housing Unit without obtaining a Co-owned Property Management Registration Certificate or Co-owned Housing Unit permit is subject to criminal sanctions and administrative penalties pursuant to [INSERT APPROPRIATE CHAPTERS] of this Code. An administrative citation issued pursuant to [INSERT APPROPRIATE CHAPTER] for a first violation shall be five thousand dollars ($5,000.00) and each subsequent violation shall be one thousand ($10,000.00) dollars. (c) Any Co-owned Property Manager or any other person that uses a Co-owned Housing Unit as a Vacation Rental or for Homesharing is subject to criminal sanctions and administrative penalties pursuant to [INSERT APPROPRIATE CHAPTERS] of this Code. An administrative citation issued pursuant to Chapter [INSERT APPROPRIATE CHAPTER] for a first violation shall be five thousand dollars ($5,00.00) and each subsequent violation shall be ten thousand ($10,000.00) dollars.
(d) Any violations of provisions of the Municipal Code, other than this Chapter, by Item 3E - Page 29
DRAFT
the owners of a Co-owned Housing Unit related to noise, nuisance, parking, trash, or occupancy limits shall be punishable by administrative fines and/or remedies as specified in the provisions of the Municipal Code. (e) Any person who fails to pay any fee or charge provided in this Chapter within the time required, shall pay a penalty in the amounts established by the City Council by resolution. Such penalty may also include interest, at the rate of 10% per annum,from the date on which the fee or charge became due and payable to the City until the date of payment.
(f) The filing of knowingly false claims against a Co-owned Property Manager and/or Co-owned Housing Unit is prohibited. Administrative penalties pursuant to Chapters [INSERT APPROPRIATE CHAPTERS] of this Code. An administrative citation issued pursuant to [INSERT APPROPRIATE CHAPTERS] for a first violation shall be five thousand dollars ($5,00.00) and each subsequent violation shall be ten thousand ($10,000.00) dollars.
Item 3E - Page 30