Palm Springs City Council
February 25, 2026

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2 meetings on February 25, 2026 and March 11, 2026, at which time all interested persons had the opportunity to appear and be heard on the matter; and WHEREAS, any and all other legal prerequisites relating to the adoption of this Ordinance have occurred.

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The City Council hereby finds that the foregoing recitals are true and correct and are incorporated herein as substantive findings of this Ordinance.

SECTION 2. Section 12.28.055 is hereby added to the Palm Springs Municipal Code to read in its entirety as follows:
“12.28.055 Vehicle Commercial Activity in Public Right-of-Way – Prohibited; Safe Harbor; Hardship Permit.
(a) Definitions. For purposes of this Section:
(1)“Adult” means, for purposes of subsection (f)(1) only, any person over the age of sixteen (16).
(2)“Person” includes any individual, firm, partnership, corporation, association, or other entity.
(3)“Proximity Radius” means one-tenth (0.1) mile, measured as a straight line distance from the nearest boundary of the parcel containing the Registered Owner Address to the
location where the Vehicle is parked or left standing, as determined by any readily available and reliable mapping or GIS methods available to the City.
(4)“Public Right-of-Way” means any public street, road, highway, alley, parkway, shoulder, or other property dedicated or accepted for public travel or use, including any parking lane, within the City.
(5)“Registered Owner Address” means the address listed for the registered owner of the Vehicle in official registration records available to the City.
(6)“Vehicle” means a vehicle as defined by state law and includes a motor vehicle, motorcycle, trailer, or other device by which persons or property may be propelled, moved, or

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2 drawn upon a highway.
(7)“Vehicle Commercial Activity” means parking, standing, stopping, placing, or leaving standing a Vehicle in the Public Right-of-Way for the primary purpose of facilitating the sale, exchange, rental, or transfer of ownership of the Vehicle for value, including conduct intended to solicit prospective purchasers, coordinate viewings or inspections, arrange test drives, or otherwise facilitate such a transaction.
(b) Prohibition. Except as expressly provided in this Section, no Person shall engage in Vehicle Commercial Activity in the Public Right-of- Way.
(c) Content-Neutral Enforcement; No Sign-Content Element. A violation of this Section may be established without regard to, and without evidence of, the content of any sign, display, writing, or communication. No particular sign or message is required to establish Vehicle Commercial Activity.
(d) Evidence; Rebuttable Presumption.
(1)In determining whether Vehicle Commercial Activity as occurred, enforcement personnel may consider the totality of circumstances, including, without limitation: repeated
placement of the same Vehicle in the same vicinity for
extended periods; repeated placement of multiple Vehicles by the same Person in the same vicinity; arranging inspections or test drives from the public right-of-way; or other conduct indicating the Vehicle is positioned or maintained to facilitate a transfer of ownership for value.
(2)Vehicle Commercial Activity shall be presumed where the same Vehicle is parked or left standing in the Public Right-of- Way within any one-thousand (1,000) foot distance for more than seventy-two (72) consecutive hours, unless the
responsible Person presents credible evidence establishing a lawful purpose unrelated to facilitating a Vehicle Commercial Activity.
(e) Safe Harbor Defense; Proximity to Registered Owner Address.

Vehicle Commercial Activity otherwise prohibited by this Section is permitted only if the person charged/cited can establish, by a preponderance of the evidence, all of the following are met:

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2 (1)The Vehicle is parked or left standing within the Proximity Radius of the Vehicle’s Registered Owner Address;
(2)The Vehicle is lawfully parked and in compliance with all other applicable restrictions, including posted time limits
established pursuant to the City’s parking regulations and applicable curb markings; and
(3)The Vehicle is not parked or left standing in a manner that creates a traffic or pedestrian safety hazard, including, but not limited to, obstruction of sight distance, interference with traffic control devices, blocking driveways, or stopping or parking in prohibited safety zones.
(f) Limitations. The safe harbor defense in subsection (e) shall not apply if:
(1)More than one (1) Vehicle per Adult residing at the same Registered Owner Address is parked or left standing in the Public Right-of-Way for purposes of a Vehicle Commercial Activity at the same time; or
(2)The Vehicle is parked or left standing in the Public Right-of- Way for purposes of Vehicle Commercial Activity for more than seventy-two (72) consecutive hours, unless otherwise permitted by the applicable posted time limits or other applicable law.
(g) Exemptions. This Section does not apply to:
(1)Vehicles stopped or left standing due to mechanical failure, collision, emergency, or at the direction of a police officer, authorized officer, or traffic control device;
(2)Vehicles placed pursuant to a City-issued encroachment permit, special event permit, filming permit, or other written authorization that expressly allows right-of-way occupancy for a limited time and place; or
(3)Government vehicles used in the performance of official duties.
(h) Administrative Regulations. The City Manager is hereby authorized to promulgate administrative regulations interpreting and implementing the provisions of this Section.

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2 (i) Enforcement; Penalties; Remedies.
(1)Violations of this Section may be enforced by any peace officer or code enforcement officer of the City.
(2)Violations may be enforced through administrative citation in accordance with the City’s administrative citation procedures set forth in Chapter 1.06.
(3)Each day a violation continues constitutes a separate violation.
(4)A Vehicle involved in a violation of this Section may be subject to removal only to the extent authorized by state law and in accordance with applicable City towing procedures.
(5)The remedies provided herein are cumulative and in addition to any other remedies available at law.
(j) Relationship to other Regulations. This Section is in addition to, and does not limit, the City’s authority to establish parking prohibitions or time limits by sign or marking pursuant to State or City parking regulations, including Palm Springs Municipal Code Section

12.32.010.”
SECTION 3. The City Council finds that the proposed actions are not a project subject to the California Environmental Quality Act (“CEQA”). (State CEQA Guidelines, § 15060(c)(3).) Section 15378 of the State CEQA Guidelines provides that organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment do not qualify as a project subject to CEQA. Here, the proposed ordinance constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment because it establishes regulations governing vehicle commercial activity in the public right-of-way. Accordingly, the proposed actions are not a project subject to CEQA. Even if the proposed actions do qualify as a project subject to CEQA, they would be exempt from CEQA because it can be seen with certainty that there is no possibility that the proposed actions in question may have a significant effect on the environment for the same reasons referenced above. (State CEQA Guidelines, § 15061(b)(3).)
SECTION 4. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance for any reason is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence,

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2 clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

SECTION 5. The documents and materials that constitute the record of proceedings on which these findings are based are located at City Hall for the City of Palm Springs, located at 3200 East Tahquitz Canyon Way, Palm Springs, California. The City Clerk is the custodian of the record of proceedings.

SECTION 6. This Ordinance takes effect thirty (30) days following its adoption.

PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS _____ DAY OF _________, 2026.

NAOMI SOTO
MAYOR
ATTEST:

BRENDA PREE, MMC

CITY CLERK

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2 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. ____ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Springs City Council on _________ and adopted at a regular meeting of the City Council held 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

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CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 25, 2026 BUSINESS & LEGISLATIVE
SUBJECT: FISCAL YEAR 2024-2025 FINANCIAL AUDIT REPORTS OF THE CITY

OF PALM SPRINGS
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:

The certified public accounting firm of Clifton Larson Allen LLP (CLA) completed the annual financial reports of the City as of June 30, 2025.

RECOMMENDATION:

Receive and file the following Financial Audit Reports for the fiscal year June 30, 2025:
• Annual Comprehensive Financial Report (ACFR)
• Audit Communication Letter to the City Council
• Passenger Facility Charge (PFC) Report
• Housing Successor Audit Communication letter to the City Council • Public Financing Authority Financial Statements
• Independent Accountant’s Agreed Upon Procedures to Appropriations (GANN) • Measure D Independent Accountant’s Agreed Upon Procedures • Measure A Independent Accountant’s Agreed Upon Procedures (Conrad CPA Firm)
• Measure J Financial Statements and Independent Auditors’ Report STAFF ANALYSIS:

Based on the results of their audit, Clifton Larson Allen LLP provided the City with an unmodified opinion on the financial statements, which means that the City’s financial statements are fairly presented in all material respects and are in accordance with Generally Accepted Accounting Principles (GAAP).

The specific financial documents on which the auditor expresses an opinion are: 1) the financial statements, and 2) notes to the basic financial statements which include required supplementary information. These documents, along with the auditor’s opinion, audit

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City Council Staff Report
February 25, 2026 -- Page 2
FY 2024-2025 Financial Audit Reports
communication letter, and report on internal controls form the core of the Annual Comprehensive Financial Report (ACFR).

Additional documents that make up the ACFR include: the letter of transmittal, management discussion and analysis (MD&A), and a supplemental section which includes a statistical section presenting detailed information to assist the reader in assessing the economic condition of the City.

Clifton Larson Allen LLP and City staff are currently in the process of completing the single audit and the report should be issued by March 31, 2026. The single audit report will be presented as a receive and file item on the consent agenda at a future City Council meeting.

The Measure J Annual Financial Report will be presented to the Measure J Oversight Commission at the February 19th Commission meeting.

The FY 2024-25 audited financial reports are available on the City’s webpage at the following link:

Annual Comprehensive Financial Report | City of Palm Springs Hard copies of the reports are available by request to the Department of Finance and Treasury.

ALIGNMENT WITH STRATEGIC PLANNING:

This item aligns with the following City Council Strategic Plan Broad Goal: Public Safety and Community Services.

FISCAL IMPACT:

None.

REVIEWED BY:

Department Director: Kristopher J. Mooney
City Manager: Scott Stiles

ATTACHMENTS:

None.

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CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 25, 2026 BUSINESS & LEGISLATIVE
SUBJECT: GENERAL FUND, AIRPORT, AND CAPITAL MID-YEAR FISCAL YEAR 2025-26 BUDGET UPDATE AND FORECAST
FROM: Scott C. Stiles, City Manager
BY: Department Of Finance And Treasury
Department of Engineering
Department of Aviation
SUMMARY:

This item will provide City Council with an update on General Fund revenues and expenses, Airport Fund revenue and expenses, and Capital for the first half of the Fiscal Year 2025-26.

RECOMMENDATION:

Receive and File.

STAFF ANALYSIS:

GENERAL FUND:

General Fund Revenue Highlights
The General Fund ended the first half of FY26 with total operating revenues of $56.3 million. This is up by $3.8 million or 7.2% from the first half of FY25. While the top three tax revenues – Transient Occupancy Tax (TOT), Property Tax, and Sales & Use Tax – are up by 11.5% combined, Permits, Fines & Fees, Utility User Tax, Motor Vehicle Tax, Other Taxes, Misc. Income, Franchise Tax, Cannabis Tax and Interest Income are down by 0.5% combined.

Compared to the adopted budget for FY2025-26, the General Fund achieved in the first half 33% of the annual total operating revenue budget. This achievement is two percent points better than the first half of FY25 (31%). The top three tax revenues achieved 31% of their total budget amounts in the first half of FY26, compared to 28% in the first half of FY25.

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City Council Staff Report
February 25, 2026 -- Page 2
2025-2026 Mid-Year Budget Update
2026 202620262025 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Revenues
Transient Occupancy Tax 3,582 10,84514,42711,908 2,519 21% 49,106 29% Property Taxes 68 13,35513,42312,643 779 6% 38,261 35%
Sales and Use Taxes 2,201 6,8259,0278,512 515 6% 29,839 30% Permits, Fines, and Fees 3,157 4,1937,3507,022 328 5% 16,178 45% Utility Users Tax 1,888 3,0064,8945,397 (503) -9% 10,905 45% Motor Vehicle In-Lieu Tax 0 68680 68 100% 8,061 1%
Other Taxes 110 214324347 (23) -7% 6,998 5%
Miscellaneous Income 889 2,6813,5703,416 154 5% 4,521 79% Franchise Tax 395 6071,002638 364 57% 4,363 23%
Interest Income 964 8131,7772,030 (253) -12% 3,833 46%
Cannabis Tax 141 260401557 (156) -28% 1,038 39%
Total Revenue 13,396 42,866 56,262 52,471 3,791 7% 173,103 33% Expenses
Admin & Economic Development 1,727 2,8984,6254,058 567 14% 8,653 53% Development Services 3,435 3,6817,1167,229 (113) -2% 18,620 38% Fire Department 6,709 8,14414,85314,442 410 3% 29,362 51% General Government 4,495 5,97110,4669,358 1,108 12% 21,237 49% Library 712 9221,6341,634 (0) 0% 3,291 50%
Miscellaneous Expense 0 1,7551,7551,976 (221) -11% 2,031 86% Parks and Recreation 2,128 3,8916,0194,058 1,961 48% 11,666 52% Police Department 9,970 11,78821,75822,347 (588) -3% 43,843 50% Public Works 1,686 3,0054,6916,547 (1,856) -28% 10,743 44% Tourism and Community Support 1,838 2,3254,1633,911 252 6% 8,148 51% Transfers to Other Funds 2,177 2,1774,35411,646 (7,292) -63% 8,709 50% Total Operating Expenses 34,877 46,557 81,435 87,207 (5,773) -7% 166,302 49% Operating Surplus/(Deficit) (21,482) (3,691) (25,173) (34,737) 9,564 -28% 6,801 Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
TABLE 1
Mid-Year revenue highlights are presented below:
Transient Occupancy Tax (TOT) on cash basis is up $2.5 million or 21% from FY25 YTD. The increase is a result of timing differences due to cash collections. The reconciliation from cash basis to modified accrual for the first half indicates TOT is flat to FY25 YTD (-0.2%).
Property Tax is up $0.8 million or 6%, largely due to higher assessment values of homes and properties. The City receives two more large distributions of property tax in the 3rd and 4th quarter of the fiscal year.
Sales tax revenue is up $0.5m or 6% from FY25 YTD. This represents the months July through October (sales tax collection is two months behind). Permits Fines and Fees are up by $0.3 million or 5% largely due to the increase in mutual aid overtime revenue and higher safety charge for Police and Fire to the airport in FY26.

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City Council Staff Report
February 25, 2026 -- Page 3
2025-2026 Mid-Year Budget Update
Utility Users Tax (UUT) continues the slight downward trend and is down $0.5 million or 9% from FY25 YTD, largely due to lower payments from SoCal Edison and Desert Community Energy.
Motor Vehicle in Lieu Tax is usually received largely in February and June of each year from the County of Riverside for the Vehicle License Fee (VLF) - 0.65% of value of vehicle. The small payment of $67k in the first half of FY26 is from an “allocation of vehicle license fees collection in excess” from prior year. Other Taxes are down by $20k or 7%, largely due to lower revenue for new development tax in FY26. FY25 YTD includes large tax payment from West Coast Self Storage ($78k).
Misc. Income consists mostly of Administrative Service Charge and the Master Lease Rent (combined over 75% of misc. income) and is up $154k or 5%, largely due to an increase in restricted donations (+$200k) from a new contract with PS Resort for contributions for events, programs, and activities ($250k annually). Interest Income is down by $0.3 million or 12% due to portfolio cash balances down and lower rate of return.
Cannabis Tax is down $0.2 million or 28%, due to fewer dispensaries and lower sales impacted by the dominance of the illegal market.

General Fund Operating Expense Highlights
The General Fund ended the first half of FY26 with total operating expenses of $81.4 million. This is down by $5.8 million or 7% from FY25 YTD. Main reasons are less transfers from the General Fund to other funds (-$7.3 million) and lower charges for facility service and fleet maintenance (-$2.3 million). These cost reductions are offset by higher expenses for salaries & benefits (+$1.8 million) and contractual services, insurance, utilities, and computer software (combined +$2.2 million).

Compared to the adopted budget for FY2025-26, the General Fund achieved in the first half 49% of the annual total operating expense budget. This achievement is two percent points better than the first half of FY25 (51%).

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City Council Staff Report
February 25, 2026 -- Page 4
2025-2026 Mid-Year Budget Update
FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Expenses By Type
Salaries & Benefits 22,031 27,935 49,966 48,200 1,766 4% 98,340 51% Contractual Services 3,938 6,311 10,250 9,788 462 5% 23,254 44% Transfers to Other Funds 2,177 2,177 4,354 11,646 (7,292) -63% 8,709 50% Insurance Expense 1,443 1,439 2,882 2,373 509 21% 5,752 50% Maintenance Expense 1,330 1,239 2,569 4,520 (1,951) -43% 5,467 47% Fleet Maintenance 1,119 1,110 2,230 2,587 (357) -14% 4,442 50% Utilities Expense 558 1,437 1,995 1,456 539 37% 3,430 58% Special Programs 310 484 794 632 163 26% 2,846 28%
Loan Principal & Interest 162 0 162 0 162 100% 2,216 7% Computer Software 798 922 1,719 1,061 658 62% 2,125 81% Materials and Supplies 345 492 838 776 61 8% 1,762 48%
Improv., Furniture and Equip. 9 79 88 140 (52) -37% 1,599 5% Employee Develop. & Travel 170 265 435 424 11 3% 1,283 34% Other 486 2,666 3,151 3,603 (452) -13% 5,078 62%
Total Operating Expenses 34,877 46,557 81,435 87,207 (5,773) -7% 166,302 49% Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %
TABLE 2
Mid-Year expenses by category highlights are presented below:
Salaries and Benefits are up by $1.8 million or 3.7% from FY25 YTD, due to scheduled salary increases with staff labor unions and higher premiums for workers’ compensation (+15%). Hiring of staff is limited to backfilling only key, business-critical positions.
Contractual Services are up $0.5 million or 4.7% from FY25 YTD, largely due to price adjustment clauses for multiple-year contracts.
Transfers to Other Funds are down by $7.3 million or 63% due to reduced transfers from General Fund to other funds per adopted budget (in FY26 only to Debt.

Service Fund; FY25 included Debt. Service Fund, Fleet Services, and Facility Maintenance Fund).
Insurance Expense is up $0.5 million or 21% from FY25 YTD, largely due to higher premiums for excess liability (+15%) and Property (+10%). Maintenance Expense is down $2.0 million or 43% from FY25 YTD, largely due to lower facility maintenance expense allocation to the General Fund, per adopted budget.
Fleet Maintenance is down $0.4 million or 14% from FY25 YTD, largely due to lower fleet expense allocation to the General Fund, per adopted budget. Utilities Expenses are up $0.5 million or 37% from FY25 YTD, largely due to higher expense allocation from the CoGen Facility (kw/h rate increase). Computer Software is up $0.7 million or 62% from FY25 YTD, largely due to the continued centralization of software purchases from the IT department. This centralized procurement of software is included in the adopted budget for FY26.

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City Council Staff Report
February 25, 2026 -- Page 5
2025-2026 Mid-Year Budget Update
Materials and Supplies are up $61k or 8% from FY25 YTD, largely due to the fire department’s purchase of fire hoses to outfit two new engines. Improvement, Furniture and Equip. is down $52k or 37% from FY25 YTD, largely due to less purchases for IT equipment (30 Cisco Catalyst APS in FY25 YTD) and engineering equipment (OCE Plotwave Printer & 5 year maintenance).

Mid-Year expenses by department are presented below:
General Government is up $1.1 million or 12% over FY25 YTD, largely because of centralized software purchases through the IT department (+$0.7 million). Parks & Recreation is up by $2 million or 48%, largely due to the addition of Park Maintenance in May 2025.
Public Works is down $1.9 million or 28%, largely due to transfer of Park Maintenance to Park & Recs.
Transfer to Other Funds is down $7.3 million or 63%, due to the discontinued transfers from General Fund to Fleet Maintenance Fund and Facility Maintenance Fund in the adopted budget for FY26. Only the Debt Service Fund continues to receive transfers from the General Fund.

All departments close the first half of the fiscal year around 50% and therefore reasonably within budget. Notable deviations from this trend are:

Development Services shows year over year in the first half of the fiscal year lower activity (FY26 YTD 38%, FY25 YTD 44%), largely due to contractual services. The second half of the year carries higher activity in contractual services mainly in Building & Safety, Planning, Homeless Programs, and Rent Control.

Misc. Expense closes mid-year at 86% of budget and is caused by the annual payment to the Bureau of Indian Affair due in December each year for the ground lease.

General Fund Non-Operating Income and Expenses
The General Fund Non-Operating are income or expenses from sources not related to the typical activities of the City, are generally not recurring, and are therefore considered separately. The activity for non-operating income and expenses is shown in Table 3 on next page.

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City Council Staff Report
February 25, 2026 -- Page 6
2025-2026 Mid-Year Budget Update
TABLE 3
Mid-Year Non-Operating highlights are presented below:
Grant Revenue is up $2.5 milllion from FY25 YTD, largely due to a payment for the construction of the Navigation Center HUD Grant ($2 million), the BSCC Organized Retail Theft Prevention Grant ($0.3 million), and the Cannabis Equity Grant ($0.3 million).
Grant Expense is up $1.4 million from FY25 YTD, largely due to expenses for the BSCC Retail Theft Prevention Grant ($0.8 million), expenses for the Encampment Resolution Funding ($0.3 million), and Cannabis Equity Grant ($0.3 million) Council Set Aside is down $1.8 million, largely due to upcoming end of the program.

The expenses accounted for in FY26 YTD are for the Rental Assistance Program ($484k), Utility Assistance Program ($27k), Neighborhood Partnership ($32k), and Housing Consulting Service ($39k).

As a reminder, the City Council approved approx. $24 million in set asides in the FY23 budget and unused set asides have been re-budgeted. The amount of set asides has been spent down to the remaining $2.9 million in the FY26 budget.

General Fund Full-Year FY26 Forecast
The City’s core revenues of Transient Occupancy Tax (TOT), Sales Tax, and Property Tax are forecasted to be at or exceeding budget. The entry points, or year to date actuals, into FY26 appear to be stronger than last year, but with a still uncertain economy City staff wants to be cognizant of that in our full year forecast. On the national economy, consumer spending has softened, with holiday season spending below expectations and current forecasts of retail spending into 2026 continuing to soften. Other leading indicators also predicting a slowing economy early in 2026. The UCLA Anderson forecast predicts California to outperform the nation, but this is largely due to Tech and AI. UCLA Anderson predicted Tourism and Hospitality to lag behind due to sluggish job growth and high costs.

Overall sentiment is a slowing economy in early 2026, but picking up strength later in the year.

Therefore, the General Fund is forecasted to close Fiscal Year 2025-26 with total operating revenues of $174.1 million. This is up by $1.0 million or 0.6% compared to the adopted budget FY26. Compared to FY25 this is down by $10.2 million or 6%.

FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Non-Operating Revenue / Expense
Grant Revenue 2,274 5562,830355 2,475 698% 11,819 24%
Grant Expense (1,000) (2,550)(3,550)(2,134) (1,417) 66% (11,819) 30% Council Set Aside Expense (503) (80)(583)(2,414) 1,831 -76% (2,900) 20% Total Non-Operating 770 (2,074) (1,304) (4,193) 2,889 -69% (2,900) 45% Total Surplus/(Deficit) (20,712) (5,765) (26,476) (38,929) 12,453 -32% 3,901 319% Amounts in Thousand USD
FY26 over
FY25
FY26 over
FY25 in %

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City Council Staff Report
February 25, 2026 -- Page 7
2025-2026 Mid-Year Budget Update
FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Revenues
Transient Occupancy Tax 3,582 10,845 14,269 20,68449,38049,106 101% 51,062 97% Property Taxes 68 13,355 9,124 16,04038,58638,261 101% 37,558 103% Sales and Use Taxes 2,201 6,825 8,004 13,32930,36029,839 102% 30,578 99% Permits, Fines, and Fees 3,157 4,193 4,371 4,89816,61916,178 103% 16,021 104% Utility Users Tax 1,888 3,006 2,157 3,13610,18810,905 93% 11,234 91% Motor Vehicle In-Lieu Tax 0 68 4,007 3,9378,0118,061 99% 7,904 101% Other Taxes 110 214 2,829 3,8216,9746,998 100% 7,346 95% Miscellaneous Income 889 2,681 793 1174,4804,521 99% 7,211 62% Franchise Tax 395 607 600 2,8964,4984,363 103% 4,318 104% Interest Income 964 813 732 1,5284,0363,833 105% 4,688 86% Cannabis Tax 141 260 253 3279811,038 94% 1,363 72%
Transfers From Other Funds 0 0 0 000 - 5,000 -100%
Total Revenue 13,396 42,866 47,139 70,711 174,112 173,103 101% 184,284 94% Expenses
Admin & Economic Development 1,727 2,898 1,896 2,1508,6718,653 100% 9,629 90% Development Services 3,435 3,681 5,189 5,14317,44818,620 94% 15,443 113% Fire Department 6,709 8,144 7,228 8,07730,15729,362 103% 29,491 102% General Government 4,495 5,971 5,271 5,49721,23421,237 100% 21,924 97% Library 712 922 770 8863,2913,291 100% 3,337 99%
Miscellaneous Expense 0 1,755 138 1382,0312,031 100% 1,976 103% Parks and Recreation 2,128 3,891 2,688 2,96011,66711,666 100% 8,577 136% Police Department 9,970 11,788 10,960 11,08543,80343,843 100% 47,806 92% Public Works 1,686 3,005 2,912 3,13610,74010,743 100% 13,773 78% Tourism and Community Support 1,838 2,325 1,907 2,0238,0928,148 99% 9,364 86% Transfers to Other Funds 2,177 2,177 2,177 2,1778,7098,709 100% 20,060 43% Total Operating Expenses 34,877 46,557 41,136 43,271 165,842 166,302 100% 181,381 91% Operating Surplus/(Deficit) (21,482) (3,691) 6,003 27,440 8,270 6,801 122% 2,904 285% 2026 2026 2026 2026FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Grant Revenue 2,274 556 5,394 3,59611,81911,819 100% 3,381 350% Grant Expense (1,000) (2,550) (4,961) (3,308)(11,819)(11,819) 100% (7,349) 161% Other (Debt Service) 0 0 0 000 3,615 0%
Council Set Aside Expense (503) (80) (110) (700)(1,393)(2,900) 48% (1,312) 106% CalPERS Payment Safety Plan 0 0 0 000 (27,979) 0%
Total Non-Operating 770 (2,074) 322 (412) (1,393) (2,900) 48% (29,644) 5% Total Surplus/(Deficit) (20,712) (5,765) 6,325 27,028 6,877 3,901 176% (26,740) -26% Amounts in Thousand USD
FY26 over
FY25 in %
FY26 over
FY25 in %
Total operating expenses of the General Fund are forecasted to close FY26 with $165.8 million. This is down by $0.5 million or 0.3% compared to adopted budget FY26. Compared to FY25 this is down by $15.5 milllion or 9%.

Accordingly, the forecasted operating surplus is projected to be up by $1.5 million or 22% of the adopted budget.

Table 4 below provides a summary of forecasted revenues and expenses of the General Fund:

TABLE 4

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City Council Staff Report
February 25, 2026 -- Page 8
2025-2026 Mid-Year Budget Update
General Fund Forecast Highlights
Revenue
Transient Occupancy Tax is forecasted to be at $49.4 milion. This is up $0.3 million or 0.6% from the adopted budget. Compared to FY25 this is down $1.7 million or 3%.
Property Tax is forecasted to end FY26 just over $38.6 million. This is up $0.3 million or 1% from the adopted budget. Compared to FY25 this is up $1.0 million or 3%. FY is expected to continue to show increased tax revenue from growing assessment values of properties.
Sales Tax is forecasted to end at $30.4 million at the end of the fiscal year. This is up $0.5 million or 2% from the adopted budget. Compared to FY25 this is down by $0.2 million or 0.7%.
Utility User Tax is projected to end at just over $10 million. This is $0.7 million or 7% below adopted budget. Compared to FY25 this is down by $1 million or 9%.

Operating Expenses
All departments are expected to stay within the adopted budget for FY26. Salaries and Benefits are forecasted at $98.6 million. This is at budget and compared to FY25 this is up $0.5 million or 1% from FY25. The City is on track to meet or exceed the vacancy savings of $4.2 million in FY26. Tourism & Community Support is projected to close at $8 million. This is down $55k or 0.7% from adopted budget. Compared to FY25 this is down $1.2 million or 14%, largely due to reduced operating budget FY26 for Convention Center and Bureau of Tourism (combined $0.5 million) and convention center utility expense increase of $0.5 million from SoCal Edison in FY25 for prior years missed charges. Contractual Services is projected at $23.3 million. This is at budget for FY26 and is up $1.9 million or 9% compared to FY25.

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City Council Staff Report
February 25, 2026 -- Page 9
2025-2026 Mid-Year Budget Update
TABLE 5
General Fund Non-Operating Revenue and Expenses Highlights Total Non-Operating is forecasted to close with a deficit of $1.4 million from the Council set aside program for the affordable housing project Desert Highland. Grant Revenue and Grant Expenses are expected to offset each other, if no timing differences occur.

Fund Balance Development and Reconciliation for the General Fund The total fund balance of the General Fund is projected at $126.1 million at the end of FY26. This is up by $6.9 million compared to the beginning balance, as a result of the expected total surplus.

The upper part of the Table 6 on the following page depicts the development of the fund balance and the lower part of the the table reconciles the assigned and unassigned fund balances for FY25 and FY26.

FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Expenses By Type
Salaries & Benefits 22,031 27,935 22,538 26,11498,61898,340 100% 98,083 101% Contractual Services 3,938 6,311 7,250 5,75223,25223,254 100% 21,367 109% Transfers to Other Funds 2,177 2,177 2,177 2,1778,7098,709 100% 20,060 43% Insurance Expense 1,443 1,439 1,441 1,4415,7655,752 100% 4,746 121% Maintenance Expense 1,330 1,239 1,282 1,2905,1415,467 94% 8,998 57% Fleet Maintenance 1,119 1,110 1,115 1,1154,4594,442 100% 5,174 86% Utilities Expense 558 1,437 885 9283,8083,430 111% 4,050 94% Special Programs 310 484 885 1,1812,8602,846 100% 1,943 147% Loan Principal & Interest 162 0 1,027 1,0272,2162,216 100% 4,324 51% Computer Software 798 922 203 2032,1252,125 100% 1,039 205% Materials and Supplies 345 492 441 4691,7481,762 99% 1,957 89% Improv., Furniture and Equip. 9 79 787 6471,5231,599 95% 502 303% Employee Develop. & Travel 170 265 336 2911,0631,283 83% 908 117% Other 486 2,666 770 6354,5565,078 90% 8,231 55%
Total Operating Expenses 34,877 46,557 41,136 43,271 165,842 166,302 100% 181,381 91% Amounts in Thousand USD
FY26 over
FY25 in %

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City Council Staff Report
February 25, 2026 -- Page 10
2025-2026 Mid-Year Budget Update
TABLE 6
The unreserved portion of the fund balance is projected at the end of FY26 with $61.6 million. This is up $4 million of 7% and Table 7 depicts the details of this development.

TABLE 7
FY25FY26
ActualsFCST
Fund Balance - General Fund
Beginning Fund Balance 145,927 119,187
Total Revenues 184,284 174,112
Total Expenses 181,381 165,842
Total Non-Operating (29,644) (1,393)
Total Surplus/(Deficit) (26,740) 6,877
Ending Fund Balance 119,187 126,064
Fund Balance Reconciliation
Assigned Fund Balances
Affordable Housing 9,007 12,007
CalPERS 18,271 19,271
Aviation Fuel Tax 1,339 1,587
Cannabis Program 66 86
Total Assigned Fund Balance 28,682 32,950
Unassigned Fund Balance
Minimum Fund Balance (20% of OpEx) 32,934 31,519
Unreserved - Remaining 57,571 61,595
Total Unassigned Fund Balance 90,505 93,114
Total End of Year Fund Balance 119,187 126,064
Amounts in Thousand USD
FY26 FCST
Beginning Fund Balance Unreserved - Remaining 57,571
CalPERS Accrual FY26 (1,000)
Affordable Housing Accrual FY26 (3,000)
Change in Aviation Fuel Tax (248)
Net Change Cannabis Program (20)
Change in Min. Fund Balance 1,415
Total Surplus/(Deficit) 6,877
Beginning Fund Balance Unreserved - Remaining 61,595
Amounts in Thousand USD

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City Council Staff Report
February 25, 2026 -- Page 11
2025-2026 Mid-Year Budget Update
Looking Ahead
Chick-fil-A – In the permitting process and planned opening in first half of 2027. In-N-Out Burger – In the entitlement process, planned opening at the end of 2027 or early 2028.
Warehouse/Fulfillment Center on Indian Canyon (North of I-10) – scheduled to open middle of 2028.
Warehouse/Fulfillment Center on Indian Canyon (North of I-10) – with two buildings (1.9m square-foot), through the entitlement process with planned opening in 2027.
College of the Desert – Palm Springs Campus plans to open in 2027. Convention Center Master Plan – Phase 1 Improvements expected to begin middle of 2026, Phase 2 Expansion and Connectivity to begin Spring of 2027.

Planned finish in 2028/2029.
Serena Park Housing Project – A 126-acre project includes plans for 286 residential lots and a private park open to the public. A Community Facilities District has been formed by the City to finance infrastructure improvements to be repaid through property tax assessments by the resident.
Red Tail Project – A 82 unit affordable housing development on 305 W. San Rafael Drive to start construction in early 2027 with a completion projected in early 2029. Pacific Properties Project – 115 unit affordable apartment project at the northwest corner of West San Rafael and McCarthy Road to start construction in early 2027 and expected completion in early 2029.
Desert Highland Scattered Site Single Family Homes – 6 units targeting home ownership. Construction to begin soon with completion expected early 2027.

PALM SPRINGS INTERNATIONAL AIRPORT
The City of Palm Springs operates Palm Springs International Airport (PSP) as a vital transportation hub and economic driver for the region. Managed as an enterprise fund, the Airport functions as a self-sustaining business entity, ensuring that its financial activities remain independent from the City’s general fund. PSP's financial structure is organized into four key categories: Customer Facility Charge, Passenger Facility Charge, Airport Fund – Operations & Maintenance, and Airport Capital Projects, each supporting various aspects of the Airport’s infrastructure, operations, and long-term development initiatives.

Customer Facility Charge Fund
The Customer Facility Charge (CFC) 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).

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City Council Staff Report
February 25, 2026 -- Page 12
2025-2026 Mid-Year Budget Update
The CFC funds are restricted and cannot be used for other purposes than improvement of rental car facilities.

Customer Facility Charge Fund revenues and expenses are shown below in Table 8.

TABLE 8
Passenger Facility Charges Fund
The Passenger Facility Charge (PFC) 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.

The PFC funds are restricted and can only be used to fund FAA-approved projects that enhance safety, security, or capacity, reduce noise, or increase air carrier competition.

Passenger Facility Charge Fund revenues and expenses are shown in Table 9 below.

TABLE 9
Airport Fund - Operations and Maintenance
Airport Revenue Highlights
The Palm Springs International Airport (PSP) ended the first half of FY26 with a total revenue of $23.8 million. This is up by $3.2 million or 16% from FY25 YTD, largely due to higher airline revenue.

FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Customer Facility Charge (CFC) Fund
CFC Revenue 467 1,7782,2452,265 (21) -1% 8,267 27%
Other Revenue 568 5291,097800 298 37% 1,498 73%
Total Revenue 1,035 2,307 3,342 3,065 2779%9,76534%
Operating Expenses 268 2845510 551 100% 2,101 26%
Total Expenses 268 284 551 0 551 100% 2,10126%
Operating Surplus/(Deficit) 767 2,023 2,791 3,065 (274) -9% 7,664 36% Amounts in Thousand USD
FY26 over FY25
in %
FY26 over
FY25
2026 202620262025 2026 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Passenger Facility Charge (CFC) Fund
PFC Revenue 795 1,1921,9871,964 23 1% 6,129 32%
Other Revenue 204 205409370 39 10% 695 59%
Total Revenue 999 1,397 2,396 2,334 623%6,82435%
Operating Expenses 3 264267367 (100) 100% 2,618 10%
Total Expenses 3 264 267 367 (100) 100% 2,61810%
Operating Surplus/(Deficit) 996 1,133 2,129 1,968 161 8% 4,206 51% Amounts in Thousand USD
2026 vs
2025

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City Council Staff Report
February 25, 2026 -- Page 13
2025-2026 Mid-Year Budget Update
Total Airline Revenues are up 27% from FY25 YTD, largely due to higher Terminal Airline Space Revenues, largely due to increases in the per-use, terminal rental and landing fee rates charged to the airlines as of August 1, 2025.

Total Non-Airline Revenues are up 10% from FY25 YTD, largely due to higher Aeronautical Ground Rental and On Airport Rental Car Revenues.

Airport Expense Highlights
The Airport Fund ended the first half of FY26 with total operating expenses of $27.8 million. This is up by $1.3 million or 5% from FY25 YTD, largely due to increased salaries & benefits and charges for the CoGen expenses for electricity and cooled water.

Airport salaries and benefits increased due to the addition of 16 positions; specifically including personnel in aviation security and landside operations departments, which were necessary to support operational growth, enhance regulatory compliance, and improve customer service.

Electricity and water cogeneration utilities (COGEN) expenses increased significantly in FY26 and are expected to remain elevated going forward.

Accordingly, the operating deficit for the first half of FY26 ended at $4.1 million. This is down by $1.8 million or 31%.

Table 10 on the following page depicts the summary of the FY26 YTD airport revenues and expenses.

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City Council Staff Report
February 25, 2026 -- Page 14
2025-2026 Mid-Year Budget Update
TABLE 10
Passenger activity during Q2 of FY26 was affected by multiple factors occurring at the same time. The federal government shutdown from October 1 through November 12, 2025 created operational disruptions across the national aviation system, leading to schedule adjustments, short-notice cancellations, and lower passenger loads.

FY26 FY26FY26FY25 FY26 Achieved
Q1 Q2Total YTDTotal YTD Adopt.Budget %
Revenues
Airline Revenues
Landing Fees 954 1,2512,2052,163 42 2% 6,995 32%
Terminal Airline Space /Joint Use 2,817 1,5494,3663,198 1,167 37% 6,851 64% Gate Per Use Fees 434 508943783 159 20% 2,266 42%
Passenger Loading Bridge Fees 124 167292161 131 82% 580 50% Baggage Handling System Fees 265 161426173 253 146% 574 74% Total Airline Revenues 4,594 3,6368,2316,478 1,753 27% 17,266 48% Non-Airline Revenues
General Aviation 38 89128123 4 4% 527 24%
Non-Aeronautical Ground Rental 200 106306265 41 15% 671 46% Aeronautical Ground Rental 550 223773658 114 17% 1,372 56% Parking 1,777 1,2883,0652,855 210 7% 6,333 48%
Airport Use Permits 12 506369 (7) -10% 120 52%
Non-Airline Terminal Rent Fee 464 236700526 173 33% 1,045 67% Non-Airline Terminal Rent F&B 165 303468454 14 3% 1,769 26% Non-Airline Terminal Rent Retail 254 345599557 42 8% 2,395 25% Non-Airline Terminal Concessions 4 266 (0) -6% 22 26%
Rental Car - Overflow Parking 8 22291 29 5691% 368 8%
Advertising 154 148302334 (33) -10% 904 33%
On Airport Rental Car 3,921 2,3586,2805,831 449 8% 14,666 43% Commercial Services Fees 173 252425382 43 11% 1,386 31% Ground Transportation Fees 229 461690485 204 42% 2,148 32% Customs 14 111124112 12 11% 448 28%
All Other Revenues 778 8001,5791,406 173 12% 3,099 51%
Total Non-Airline Revenues 8,740 6,79515,53414,065 1,469 10% 37,273 42% Total Revenue 13,334 10,431 23,765 20,543 3,222 16% 54,539 44% Expenses
Emergency Disaster 0 004 (4) -100% 0 0%
Airport Administration 1,964 1,8283,7923,346 445 13% 11,758 32% Airport Information Technology 426 162588416 171 41% 1,789 33% Airport Law Enforcement 1,099 7231,8221,856 (34) -2% 3,725 49% Aviation Security 292 417708253 455 180% 1,787 40%
Airside Operations 1,458 1,8563,3142,827 487 17% 3,167 105% Airport Rescue - Fire 1,703 1,2872,9902,580 411 16% 5,945 50% Landside Operations 692 8011,492989 503 51% 1,454 103%
Grounds Maintenance 145 164309244 65 27% 902 34%
Terminal Building Operations 1,531 4,1035,6343,634 2,000 55% 12,019 47% Passenger Boarding Bridges 17 234111 29 254% 89 46%
Baggage Handling System 80 346426222 204 92% 1,100 39%
Control Center Operations 1,284 8212,1052,599 (494) -19% 5,989 35% U.S. Customs 68 77146149 (3) -2% 516 28%
Planning & Projects 203 30951283 429 516% 1,726 30%
Budget Transfer Out 1,975 1,9753,9497,244 (3,295) -45% 7,898 50% Total Operating Expenses 12,936 14,893 27,829 26,459 1,370 5% 59,865 46% Operating Surplus/(Deficit) 398 (4,461) (4,064) (5,916) 1,852 -31% (5,326) 76% Amounts in Thousand USD
FY26 over FY25
in %
FY26 over
FY25

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City Council Staff Report
February 25, 2026 -- Page 15
2025-2026 Mid-Year Budget Update
In addition to the shutdown, three airlines did not return for the seasonal service period, further reducing available seats in the market. Flair concluded service on April 6, 2025 and Avelo on June 7, 2025, and Frontier discontinued service on November 29, 2025.

The combined effect of reduced airline service and temporary nationwide operational constraints resulted in fewer available flights and lower passenger totals during the fall months, particularly in October, November and December compared to the prior year.

Table 11 below depicts the total passenger traffic for the first half of FY26 compared to FY25
TABLE 11
Airport Full-Year FY26 Forecast
Customer Facility Charge Fund
TABLE 12
Forecast Highlights
The Customer Facility Charges are forecasted to be at $9.2 million. This is up $0.9 million or 11% from the adopted budget. Compared to FY25, this is up $0.1 million or 1%.
Other Revenue is largely interest income and is forecasted to be $2.1 million, an increase of 28% from FY25 based on the trend of the first half of FY26. Operating expenses are forecasted to be $1.1 million to be used for consultant expense for the planning of the location of the future rental car facility.

FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Customer Facility Charge (CFC) Fund
CFC Revenue 467 1,778 3,119 3,8439,2078,267 111% 9,109 101% Other Revenue 568 529 522 5182,1371,498 143% 1,664 128% Total Revenue1,035 2,307 3,641 4,36111,344 9,765116%10,773105% Operating Expenses 268 284 175 3251,0512,101 50% 761 138% Total Expenses268 284 175 3251,051 2,10150%761138%
Operating Surplus/(Deficit) 767 2,023 3,466 4,036 10,293 7,664 134% 10,012 97% Amounts in Thousand USD
FY26 over
FY25 in %

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City Council Staff Report
February 25, 2026 -- Page 16
2025-2026 Mid-Year Budget Update
Passenger Facility Charges Fund
TABLE 13
Highlights
Passenger Facility Charges are forecasted to be at $6.4 million. This is up $0.2 million or 4% from the adopted budget. Compared to FY25, this is up 0.1 million or 1%.
Other Revenue is largely interest income and is forecasted to be $0.8 million, an increase of 7% from FY25 based on the trend of the first half of FY26. Operating Expenses are largely principal and interest expense for the 2019 Airport Passenger Facility Bonds (FCST and Budget include principal of $1.9 million).

FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Passenger Facility Charge (CFC) Fund
PFC Revenue 795 1,192 1,982 2,4066,3756,129 104% 6,299 101% Other Revenue 204 205 202 201812695 117% 758 107%
Total Revenue999 1,397 2,184 2,6077,187 6,824105%7,058102% Operating Expenses 3 264 50 2,2512,5682,618 98% 460 558% Total Expenses3 264 50 2,2512,568 2,61898%460558%
Operating Surplus/(Deficit) 996 1,133 2,134 356 4,619 4,206 110% 6,597 70% Amounts in Thousand USD
FY26 over
FY25 in %

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City Council Staff Report
February 25, 2026 -- Page 17
2025-2026 Mid-Year Budget Update
Airport Fund – Operations and Maintenance
TABLE 14
Airport Budgetary Highlights
The Airport expects the projected revenues to end FY26 at $60.4 million, which is an increase of 13% compared to FY25.

FY26 FY26 FY26 FY26FY26FY26 Achieved FY25
Q1 Q2 Q3F Q4FFCST Adopt. Budget % Actuals
Revenues
Airline Revenues
Landing Fees 954 1,251 2,467 2,9887,6606,995 110% 7,937 97% Terminal Airline Space /Joint Use 2,817 1,549 2,426 2,8309,6216,851 140% 6,975 138% Gate Per Use Fees 434 508 1,009 1,2543,2052,266 141% 2,654 121% Passenger Loading Bridge Fees 124 167 341 4231,056580 182% 560 189% Baggage Handling System Fees 265 161 269 3581,053574 184% 421 250% Total Airline Revenues 4,594 3,636 6,512 7,85322,59617,266 131% 18,547 122% Non-Airline Revenues
General Aviation 38 89 180 224532527 101% 445 120%
Non-Aeronautical Ground Rental 200 106 341 326972671 145% 795 122% Aeronautical Ground Rental 550 223 349 2331,3551,372 99% 1,206 112% Parking 1,777 1,288 2,319 1,9577,3426,333 116% 6,238 118% Airport Use Permits 12 50 30 20113120 94% 120 94%
Non-Airline Terminal Rent Fee 464 236 341 1971,2371,045 118% 1,808 68% Non-Airline Terminal Rent F&B 165 303 514 7301,7121,769 97% 1,282 134% Non-Airline Terminal Rent Retail 254 345 695 9882,2822,395 95% 1,561 146% Non-Airline Terminal Concessions 4 2 11 52222 99% 23 95% Rental Car - Overflow Parking 8 22 282 86397368 108% 284 140% Advertising 154 148 258 310870904 96% 899 97%
On Airport Rental Car 3,921 2,358 4,532 2,78013,59114,666 93% 11,763 116% Commercial Services Fees 173 252 535 5451,5041,386 109% 1,396 108% Ground Transportation Fees 229 461 593 8702,1522,148 100% 1,706 126% Customs 14 111 169 165459448 102% 440 104%
All Other Revenues 778 800 786 8683,2323,099 104% 5,062 64% Total Non-Airline Revenues 8,740 6,795 11,934 10,30237,77037,273 101% 35,028 108% Total Revenue 13,334 10,431 18,446 18,155 60,367 54,539 111% 53,574 113% Expenses
Emergency Disaster 0 0 0 000 0% 26 0%
Airport Administration 1,964 1,828 2,415 5,65011,85711,548 103% 13,480 88% Airport Information Technology 426 162 345 4901,4231,781 80% 846 168% Airport Law Enforcement 1,099 723 842 1,0013,6654,026 91% 2,856 128% Aviation Security 292 417 514 1,1092,3312,593 90% 848 275% Airside Operations 1,458 1,856 1,672 1,6196,6064,889 135% 5,476 121% Airport Rescue - Fire 1,703 1,287 1,446 2,0766,5127,158 91% 4,650 140% Landside Operations 692 801 1,103 1,0513,6472,713 134% 2,977 122% Grounds Maintenance 145 164 222 458988902 110% 552 179% Terminal Building Operations 1,531 4,103 3,417 4,37313,4248,438 159% 8,932 150% Passenger Boarding Bridges 17 23 8 378689 97% 36 240%
Baggage Handling System 80 346 232 4731,1311,100 103% 914 124% Control Center Operations 1,284 821 1,006 1,0704,1814,233 99% 4,175 100% U.S. Customs 68 77 81 67294516 57% 289 102%
Planning & Projects 203 309 210 2129341,980 47% 227 411% Budget Transfer Out 1,975 1,975 1,975 1,9757,8987,898 100% 10,866 73% Total Operating Expenses 12,936 14,893 15,488 21,661 64,978 59,865 109% 57,152 114% Operating Surplus/(Deficit) 398 (4,461) 2,958 (3,506) (4,611) (5,326) 87% (3,577) 129% Amounts in Thousand USD
FY26 over
FY25 in %

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City Council Staff Report
February 25, 2026 -- Page 18
2025-2026 Mid-Year Budget Update
Revenue Highlights
Passenger traffic for the second half of FY26 is forecast to have an increase of 2.7% when compared to FY25. Enplaned passengers are the primary air traffic metric in the industry to measure airport "output" or "production," as many airport revenues, including parking, terminal concessions, and rental car privilege fees, are driven directly by passenger volume. Likewise, passenger volume is a primary driver of operating expenses.

In connection with the calculation of FY26 airline rates and charges, the Airport forecast enplaned passenger traffic of 1.683 million, or 1.8% higher than FY25 actuals. While actual fiscal-year-to-date enplaned passenger traffic through December (i.e., 6 months) was only

0.4% above the same period in FY25, schedule data published by the airlines for the second half of the year show that departing seats are scheduled to increase by 3.0%, reflecting increased service by United, Alaska, and American Applying historical load factors to the scheduled seat data indicates that the 1.683 million or 3.37 million total passengers forecast (Chart 1) is still appropriate at this time for planning purposes for FY26.

The Airport continuously monitors industry trends by reviewing changes in airline schedules on a weekly basis, in addition to reviewing leading revenue indicators such as PFC receipts.

The Airport is evaluating the changing industry outlook in connection with the preparation of its operating budget for FY26.

CHART 1
Expense Highlights
Airport Administration: The Airport now operates under a new Airport Use and Lease Agreement with the airlines, which stipulates that 50% of the net profits from the General Airport Operations Fund are shared between the Airport and the 50,000
75,000
100,000
125,000
150,000
175,000
200,000
225,000
250,000
E nplaned P assengers at P S P
2024A 2025A 2026A 2026F

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City Council Staff Report
February 25, 2026 -- Page 19
2025-2026 Mid-Year Budget Update
Signatory Airlines. Based on current projections, the airport anticipates a settlement of approximately $2.6 million with the Signatory Airlines at the end of FY26. Airport IT: The $343K favorable variance (80% of budget) can be explained by salaries forecast to come in slightly under budget, materials and supplies $148K under, and no office furniture purchases (versus $51K budgeted). Aviation Security: The $262K favorable variance (90% of budget) reflects $109K under budget in materials and repairs and $25K under in contractual services expenses, which more than offset unbudgeted salary costs. Landside Operations: The $945K unfavorable variance (135% of budget) can be explained largely by overages in contractual expenses.
Terminal Building Operations: The $5,176K unfavorable variance (163% of budget) can be explained largely by COGEN expenses coming in significantly over budget, which more than offset contractual services under budget, and materials & supplies under budget.
Budget Transfer Out: The Airport intends to transfer out approximately $7.9 million from the General Airport Operations account to the Airport Capital Projects Fund at the end of the fiscal year.

CAPITAL UPDATE
The City’s Capital funds facilitate the funding of critical projects that both increase the quality of life for the residents and ensure for the critical safety of City infrastructure as well as ensuring the public can carry out their day-to-day functions throughout.

The City is fortunate to have several special revenue funds which raise funds to be used on capital projects for a variety of purposes. The deployment of these resources has assisted City Staff in making great strides in improving the parks as well as the roadways throughout the City and will continue to do so for the foreseeable future.

There are seven (7) funds that make up the main funding sources for the 5-year capital improvement project plan managed by the City Engineering Department. A description of each fund is below, as well as for the Airport Capital Projects Fund.

Capital Fund – This fund is used for many different capital projects with a focus on streets and bridges. The revenue received is largely from Caltrans as it funds almost 90% of all major road and bridge projects. Additional revenue is federal revenue that supports the Highway Safety Improvement Program (HSIP) and the various cycles. HSIP funds are used for prevention of traffic fatalities and serious injuries focusing on safety improvements, such as improved intersections, pedestrian crossings, and traffic signal upgrades.

Measure J – Measure J is a 1% local sales tax that generates approximately $22 million annually. The tax is a general tax and can be used for anything, however, the focus of the Measure J Commission has been to use these funds largely for infrastructure capital

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City Council Staff Report
February 25, 2026 -- Page 20
2025-2026 Mid-Year Budget Update
projects within the City. The Commission for Measure J is made up of 9 voting members and 2 alternates. The Commission will recommend projects for the dollars to be used in the bi-annual budget that is ultimately approved by the City Council.

Road Maintenance and Rehabilitation Fund (RMRA) – This special revenue fund accounts for revenue received through the SB1 RMRA known as the new Gas Tax. It is apportioned to eligible cities and counties by formula to be used for road maintenance, rehabilitation, and critical safety projects.

Gas Tax – The funds received are also restricted to street construction and improvements. The revenue comes from the annually escalating tax on every gallon of gas, which is deposited in the state’s Highway Users Tax, and distributed monthly to cities and counties.

Measure A – The local measure was initiated by Riverside County in 1988 and renewed in 2009. The renewal in 2009 extended the measure to sunset in 2039. This measure is a 0.5% sales tax restricted for transportation projects. Revenue received from this tax is approximately $5.5 million annually. Measure A is also the recipient of funds received by the Coachella Valley Association of Governments (CVAG). CVAG will contribute 7.5% of the project cost for approved road and bridge projects.

Drainage Fund – The revenue from this fund is used to support improvements to the underground storm drain lines such as levees, surface retention basins and open channels. This will provide flood control for the City. The City adopted a schedule of drainage fees that are collected as an impact fee on new development whenever vacant land will be improved, and thus generating increased stormwater run-off. Annual revenue varies depending on new development.

Quimby Fund – This special revenue fund is a result of the City adopting the Quimby Fee in accordance with the Quimby Act approved by the State of California. The fee is collected on all residential development in-lieu of dedicated parks and recreation land within the development. Revenue is collected as building permits are issued and will vary based on development.

Airport Capital Projects Fund – This fund is for the Airport’s various capital projects. for critical improvements that address federal security requirements, airfield safety, environmental remediation, terminal upgrades, and development.

Several notable projects funded by these resources are shown on the following four pages. These listed projects show the total budget allocated and the actual amount spent as of December 2026 for each project (Project To Date Spend).

C – Page 201 of 263

City Council Staff Report
February 25, 2026 -- Page 21
2025-2026 Mid-Year Budget Update
TABLE 15
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
21-16 Demuth Dog Park 3,213,131 5,045,828 8,258,959 37,519 0% Measure J, Quimby & Capital
18-06 Victoria Rthhrdy Restrooms 1,562,345 - 1,562,345 - 0% Measure J 22-24 Pickleball Courts 5,605,000 - 5,605,000 782,899 14% Measure J & Quimby
22-26 San Rafael Drive Turf Conversion 137,820 242,600 380,420 39,198 10% Measure J 15-07 Downtown Park Project - Splash Pad 714,925 - 714,925 440,883 62% Measure J New Convention Center Design - 4,455,000 4,455,000 - 0% Measure J New Fire Station #1 Design - 3,000,000 3,000,000 - 0% Measure J Mizell Center Solar Canopies 500,000 - 500,000 - 0% Measure J New Palm Springs Stadium Deferred
Maintenance 841,000 - 841,000 - 0% Measure J
Palm Canyon Theatre Maintenance Repairs 270,365 80,316 350,681 - 0% Measure J Total 12,844,586 12,823,744 25,668,330 1,300,499 5%
Status
Project out to bid, expected
completion late 2027
Approved Plans/Out to bid soon
Under Construction - Award
$5,015,219
100% design to be complete by Jan.
1st
Awaiting components, work to
continue into February
Architect Contract Awarded - Kick
off meeting in January
RFP being worked for site location
Had meeting - executing agreement
Scope Review and preliminary
discussion in January
Door and Window replacement and
repair, pending order.

EXECUTIVE SUMMARY
Measure J
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
16,141
4,455
1,692
3,000
380
1,261
- - - 39
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Parks & Recreation Citywide & Cogen Community Initiated Projects Fire Station Roads, Maintenance & Traffic Measure J Project by Category
(in $ thousands)
Budget to Date Project to Date Spend

C – Page 202 of 263

City Council Staff Report
February 25, 2026 -- Page 22
2025-2026 Mid-Year Budget Update
TABLE 16
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
01-11 Indian Union Pacific RR Bridge 59,784,356 500,000 60,284,356 26,383,266 44% Capital/Measure A/WWTP
08-25 Ramon Road Bridge 33,348,036 10,500,000 43,848,036 4,295,254 10% Capital/Measure A 12-02 S Palm Canyon Tahquitz Creek Bridge 14,888,386 200,000 15,088,386 5,279,629 35% Capital/Measure A 12-04 EPC Palm Canyon Wash Bridge 9,813,936 2,150,000 11,963,936 1,088,855 9% Capital/Measure A 16-08 Main Library Renovations 15,120,100 27,479,685 42,599,785 3,995,873 9% Capital/Measure J /Bond
25-06 New Swim Center - 7,000,000 7,000,000 - 0% Measure J/Bond 18-14 Gene Autry Wind Wall 2,680,694 600,000 3,280,694 1,596,620 49% Capital/Measure A 22-24 Pickleball Courts 6,050,000 - 6,050,000 977,374 16% Quimby, Measure J 25-09 New WWTP Scada Improvements - 4,350,000 4,350,000 - 0% Wastewater Treatment Plant
25-10 New WWTP Upgrade Lift Stations - 5,800,000 5,800,000 - 0% Wastewater Treatment Plant
25-11 New WWTP Digester No. 1 Replacement - 7,250,000 7,250,000 - 0% Wastewater Treatment Plant
Total 141,685,509 65,829,685 207,515,194 43,616,871 21% Contract awarded, under
construction, exp. completion 2027
Construction to begin 2026,
completion late 2027

EXECUTIVE SUMMARY
Engineering Projects
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
Status
Under Construction, expected
completion late 2027
Completing Right of Way Phase,
expect bid mid 2026
Under Construction, expected
completion late 2027
Right of way Design 2026,
construction early 2027
Under design 2026, expected
construction to begin 2027
Under design 2026, expected
construction to begin 2027
Under Construction, completion
late 2026
Contract awarded, under
construction, exp. completion 2027
Under design 2026, expected
construction to begin 2027
131,185
49,600
3,281 6,050
17,400
37,047
3,996 1,597 977 -
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Roads & Bridges Library & Swim Center Flood, Wind & Storm Control Parks & Recreation Wastewater Engineering Project by Category
(in $ thousands)
Budget to Date Project to Date Spend

C – Page 203 of 263

City Council Staff Report
February 25, 2026 -- Page 23
2025-2026 Mid-Year Budget Update
TABLE 17
Project Description
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend % Complete Fund Sources
PW26-03 City Hall Large Conference Room Upgrade 210,613 9,000 219,613 219,613 100% Meas ure J / Def.Maint.

PW26-06 Muni Plant - Upgrade Switch Gear - 1,000,000 1,000,000 285,986 29% Meas ure J / Def.Maint.

PW26-13 Police Department Lobby Ballistic Doors - 140,000 140,000 - 0% Meas ure J / Def.Maint.

PW26-23 City Hall Lobby Renovation - 80,000 80,000 - 0% Design Phase Meas ure J / Def.Maint.

PW26-08 Pavilion Restrooms & Ceiling Remediation
Repair - 150,000 150,000 - 0% Meas ure J / Def.Maint.

PW26-05 Playground Equipment Replacement
(Desert Highland Park) - 800,000 800,000 - 0% Meas ure J / Def.Maint.

PW26-09 CVEP Roof Replacement - 230,000 230,000 230,000 100% Project Complete Meas ure J / Def.Maint.

PW26-44 Firearms Training Facility - 3,000,000 3,000,000 - 0% Meas ure J / Def.Maint.

PW26-57 Belardo/Baristo Parking Structure Safety
Study - 1,218,000 1,218,000 - 0% Deferred Maintenance
PW26-10 Realtime Crime Center Buildout Prep - 230,000 230,000 227,629 99% Project Complete Deferred Maintenance PWF26-1 Fire Pumper Apparatus - Pierce - 2,134,054 2,134,054 1,707,244 80% Meas ure J / Def.Maint.

Total 210,613 8,991,054 9,201,668 2,670,472 29%
Status
Approved by City Council on 12/10/25
and preparing for groundbreaking in the
coming months
Submittal approval in progress;
installation expected in May
Phase 1 complete; Phase 2
scheduled for March
Project Complete
Build-back underway; project
scheduled for completion in May

EXECUTIVE SUMMARY
Deferred Maintenance
Capital Projects - FY 25-26 YTD December
Design Phase in progress;
construction anticipated to begin
late summer
Apparatus arrived; outfitting in
process
(Unaudited numbers and subject to change)
Recommendation plans approx.
60% complete
2,748
950
3,370
2,134
736
-
228
1,707
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Citywide & Cogen Parks & Recreation Police Vehicle
Deferred Maintenance Project by Category
(in $ thousands)
Budget to Date Actual Spend to Date

C – Page 204 of 263

City Council Staff Report
February 25, 2026 -- Page 24
2025-2026 Mid-Year Budget Update
TABLE 18
Budget
Through
FY2025
FY2026
Budget
Total
Budget
Project to
Date Spend
%
Complete Status Fund Sources
93,569,359 - 93,569,359 2,433,202 3%
General contractor
Swinerton has been
mobilized, Pre-
construction meeting has
been scheduled for late-
January
BHS $12m, AIG
$21m, AIP $8m, TSA
$25m
3,600,000 - 3,600,000 - 0% Design complete;
awaiting egress analysis CIP
2,500,000 - 2,500,000 14,090 1%
Vendor selection is
complete, taking
contract ratification to
City Council in February.

CIP
1,300,000 - 1,300,000 947,451 73%
Project is in progress,
90% construction set
documents have been
submitted for airport and
city review
CIP
1,000,000 - 1,000,000 21,745 2%
Project in initial shade
structure study phase; 2
proposals received for
further evaluation and
selection
Measure J
700,000 500,000 1,200,000 - 0%
Bidding process is
complete mid-
December; evaluation in
process
Improvement other
than Buildings
659,650 - 659,650 640,932 97%
Final presentation
submitted to PSP staff,
Project in final stages of
completing the design
standards
Contractual
Services
559,125 500,000 1,059,125 - 0% Trucks delivery expected by late-January 2026 ZEV Grant $559,125
536,000 - 536,000 575,820 107% Project completed Other Equipment 500,000 - 500,000 - 0%
Notice to Proceed in
process; project
mobilization expected
February 2026
CIP
Total 104,924,134 1,000,000 105,924,134 4,633,240 4%
Procure (8) Eight Battery Electric Pick-up Trucks
Repair Airport Elevators
Hangar 18 Outfall Repair
Airport Projects
Capital Projects - FY 25-26 YTD December
(Unaudited numbers and subject to change)
Escalator In-Truss Modification
Renovate Terminal Restrooms - Design
Construct Taxi & TNC Shade Structures - Preliminary Design Studies Parking Access & Revenue Control System
Integrated Design Standards & Guidelines
Description
Baggage Handling In-Line System
Replace Breach Gate Revolving Door System

EXECUTIVE SUMMARY
93,569
3,600 2,500 1,300 1,059 3,896 2,433 - 14 947 - 1,238
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
BHS Breach Gate Escalator Restroom Electric Vehicles Other Projects Airport Project by Category
(in $ thousands)
Total Budget Project to Date Spend

C – Page 205 of 263

City Council Staff Report
February 25, 2026 -- Page 25
2025-2026 Mid-Year Budget Update
ALIGNMENT WITH STRATEGIC PLANNING:

This item aligns with the following City Council Strategic Plan Foundation: Financial and Organizational Well-Being.

FISCAL IMPACT:

This is an update item only, so there is no fiscal impact at this time.

REVIEWED BY:

Director of Finance and Treasurer: Kristopher J. Mooney City Engineer: Joel Montalvo
Assistant Airport Director: Victoria A. Carpenter
Executive Director of Aviation: Harry Barrett Jr., A.A.E.

City Manager: Scott Stiles
ATTACHMENTS:

None.

C – Page 206 of 263

Project Description Total Budget
%
Complete Status Fund Sources
01-11 Indian Union Pacific RR Bridge 47,284,356 56% Under construction, expected completion late 2027 FHWA/Capital/Measure A 01-11B Indian Canyon Sewer 13,000,000 80% Under construction, expected completion June 2026 WWTP 06-18 S Palm Canyon Bridge at Bogert Trail 10,167,121 10% Under environmental review FHWA/Capital/Measure A 08-25 Ramon Road Bridge 43,848,036 10% Completing Right of Way Phase, expect bid mid 2026 FHWA/Capital/Measure A 10-10 Vista Chino Bridge 135,700,000 10% Design in progress (65% complete), expected construction to begin 2029 FHWA/Capital/Measure I
12-02 S Palm Canyon Tahquitz Creek Bridge 15,088,386 35% Under construction, expected completion late 2027 FHWA/Capital/Measure A 12-04 EPC Palm Canyon Wash Bridge 11,963,936 9% Right of way Design 2026, construction early 2027 Capital/Measure A 16-08 Main Library Renovations 42,599,785 9% Construction to begin 2026, completion late 2027 Capital/Measure J/Bond 18-05 Traffic Signals - HSIP Cycle 9 2,502,700 10% Under construction, expected June 2026 State HSIP 18-14 Gene Autry Wind Wall 3,280,694 100% Completed February 2026 Capital/Measure A 20-25 WWTP Digester 2 & Flare 20,415,802 100% Completed in February 2026 WWTP 21-06 WWTP Demolition 3,000,000 80% Under construction, expected April 2026 WWTP 21-10 TOC Communications Upgrades 667,000 90% Under construction, expected April 2026 Measure A 21-16 Demuth Park Improvements 6,490,150 0% Construction begins March 2 2026, completion September 2026
Measure J & Quimby (State
Grant Reimbursement)
22-19 Fire Station #1 & #3 Upgrades 35,000,000 0% Draft RFP for design/building contract scheduled to be advertised March Spring 2026 Bonds/Measure J
22-21 S Palm Canyon & Racquet Club Road
Traffic Calming 1,420,000 50% Design in progress, expected construction to begin September 2026 State HSIP
22-24 Pickleball Courts 6,050,000 40% Under construction, expected completion mid 2026 Quimby, Measure J 23-12 Traffic Signals - HSIP Cycle 11 1,420,000 50% Design in progress, expected construction to begin September 2026 State HSIP
23-13 Sewer Master Plan Update 350,000 100% Master Plan Completed WWTP 23-16 WWTP Odor Control Improvements 7,200,000 90% Design in progress, expected construction to begin September 2026 WWTP
25-04 Lighted Pedestrian Crossing Upgrades 3,500,000 40% -Design is currently in progess for Uptown locations,
expected construction to begin Summer 2026.
-Design is also set to begin for East Palm Canyon crosswalk locations. Construction is rougly estimated to be early 2027 for East Palm Canyon locations.
-Measure A & Gas Tax for
Design Phase ($187,500)
-Measure J for Construction
($3,500,000)
24-05 TSI Indian Canyon & Via Escuela 1,144,916 50% Under construction, expected completion September/October 2026 SB1 RMRA
24-06 Citywide Sign Inventory 374,745 75% Final report to be received in April 2026 Measure A/ Gas Tax 25-01 Citywide Pavement Rehab 8,667,901 100% Completed January 2026 Measure J 25-02 Citywide Slurry Seal 2,038,506 100% Completed February 2026 Measure A/ Gas Tax 25-03 Storm Drain Line 06 7,400,000 0% Design contract awarded, expected construction to begin in May 2027 Capital/Drainage
25-06 Swim Center 7,000,000 0% Desing phase has just begun, Construction to begin late 2026, completion late 2027 Measure J/Bond
25-08 Traffic Signal Fiber Installation 1,800,00 5% Draft RFP for consultant being prepared, rough estimated construction start date in Spring 2027 Measure A/ SB1 RMRA 25-09 WWTP Scada Improvements 4,350,000 0% Under design 2026, expected construction to begin 2027 Wastewater Treatment Plant 25-10 WWTP Upgrade Lift Stations 5,800,000 0% Under design 2026, expected construction to begin 2027 Wastewater Treatment Plant 25-11 WWTP Digester No. 1 Replacement 7,250,000 0% Under design 2026, expected construction to begin 2027 Wastewater Treatment Plant 25-12 2026 Pavement Master Plan Update 309,977 40% Final PMP report expected in April/May 2026 Gas Tax/Measure A 25-13 Tahquitz Creek Sewer Improvements 420,000 0% Design contract awarded, expected completion 8/2027 WWTP 26-05 Convention Center Modernization 135,000,000 1% Design Services Starting Bonds N/A
Traffic Calming Projects - General 100,000 30% 5 active traffic calming projects under study - Anticipated April Construction Gas Tax
N/A Sunny Dunes Restriping Unkown 5% $33,000 for Design. Design in progress. Schedule to be Eco Dev and Unknown Total 635,720,918 7%

EXECUTIVE SUMMARY
Engineering Projects
Capital Projects
(Unaudited numbers and subject to change)

C – Page 207 of 263

CITY COUNCIL STAFF REPORT
DATE: FEBRUARY 25, 2026 BUSINESS & LEGISLATIVE
SUBJECT: UPDATE ON OFFICE OF ECONOMIC DEVELOPMENT STRATEGIC

FRAMEWORK IMPLEMENTATION PLANNING
FROM: Scott C. Stiles, City Manager
BY: Economic Development
SUMMARY:

On November 24, 2025, the City Council approved the Palm Springs Economic Development Strategic Framework (EDSF) (Attachment A) and directed staff to initiate implementation. The EDSF established a clear, multi-year roadmap to diversify the local economy, modernize City systems, strengthen core industries, and improve the overall business climate.

This report presents a proposed implementation strategy prepared by CVL Economics that translates the adopted EDSF into a coordinated, execution-focused work program.

The strategy organizes implementation around four integrated activation areas: (1) a Digital Economic Development Hub, (2) targeted Municipal Code and regulatory review, (3) a citywide Business Districts framework, and (4) development of a practical fiscal toolkit. Together, these efforts are intended to deliver early, tangible improvements while building durable internal capacity for long-term economic development.

Staff recommends that the City Council support the implementation strategy proposed by CVL Economics and approve funding for implementation consulting services to ensure disciplined execution, cross-departmental coordination, and timely delivery of priority actions identified in the EDSF.

RECOMMENDATION:

1. Approve the implementation strategy proposed by CVL Economics for the implementation of the Palm Springs Economic Strategic Framework; and,

2. Approve the amount of $285,750 for implementation consulting services from the Economic Development FY 2026 budget.

D – Page 208 of 263

City Council Staff Report
February 25, 2026 -- Page 2
Update on Economic Development Strategic Framework Implementation Planning 7 3
2 BACKGROUND:

The City opened its Office of Economic Development in January of 2024. At that time, a Chief Economic Development Officer was hired, along with the Business District Administrator, to set forth on enhancing Economic Development activities, policies and programs to address the pent up demands of business within the Palm Springs community. Due to the high volume of external and internal constituent requests, it quickly became apparent that an organizing framework would be beneficial to structure available staff time and resources under agreed upon priorities.

The City hired CVL Economics in late 2025, who embarked on the development of the EDSF vision, principles and initiatives. They worked with City Leadership, Staff and hundreds of businesses and citizens via surveys and meetings to encourage participation in formulation of the plan. The Mayor’s Council on Economic Development was formed in early 2025, to shepherd the early development of the plan which evolved into nearly 100 stakeholders being polled on their thoughts on the framework.

In November of 2025, the City Council convened a special session to review the EDSF and approve the plan as the City’s guiding document for economic development activities.

While the EDSF established principles, initiatives, and actions across short-, medium-, and long-term horizons, the next phase requires focused implementation support. Many of the framework’s highest-priority actions involve regulatory coordination, program design, and cross-functional alignment that extend beyond routine departmental operations. To address this need, CVL Economics prepared an integrated implementation plan that consolidates priority actions into a unified, time-bound work program. (Attachment B)
STAFF ANALYSIS:

Implementation Planning:

The proposed implementation strategy is structured as a single, coordinated program rather than a series of independent initiatives. The approach emphasizes early execution, internal alignment, and capacity-building so that improvements are both visible and sustainable. The implementation effort is organized around four activation strategies:

1.Digital Economic Development Hub – Development of a centralized, business-facing digital platform that serves as Palm Springs’ primary “front door” for entrepreneurs, investors, and businesses. This platform will consolidate resources, clarify processes, and communicate economic opportunity in a clear, action-oriented format.

2.Municipal Code and Regulatory Review – A targeted review of selected municipal code provisions and permitting processes that directly affect economic development outcomes. The work will identify and prioritize barriers, distinguish

D – Page 209 of 263

City Council Staff Report
February 25, 2026 -- Page 3
Update on Economic Development Strategic Framework Implementation Planning 7 3
2 quick administrative wins from items requiring Council action, and produce implementation-ready recommendations.

3.Business District Framework – Establishment of a citywide framework for defining, supporting, and activating Palm Springs’ commercial districts. This includes district typologies, governance and funding options, and prototype district concepts that can be scaled over time.

4.Fiscal Toolkit Development – Preparation of a practical, City-specific fiscal toolkit that aligns incentive and financing mechanisms with defined economic development use cases, improving consistency, transparency, and decision-making.

These activation areas are intentionally interdependent: regulatory reforms support district activation, fiscal tools help catalyze investment, and the digital platform communicates improvements to the market. Executing them in parallel allows the City to maximize efficiency and momentum.

Short Term Action Items:

As seen on November 24, 2026, the EDSF is organized into a hierarchy of principles, discussed above, as well as initiatives and action items. The action items were identified in two key elements:

1. Time Horizon (Short, Medium and Long), and

2. Lead Entity.

Attachment B is a comprehensive list of the first 38 action items that are recommended to be implemented within two years of the establishment of the implementation framework. Some of these can be accomplished with Economic Development staff and resources, however, in order to accomplish all 38, other departments and, in some cases, external agencies, will need to be designated as Lead Entity for that action item. Several of the items included in this list are already underway.

Looking ahead:

And while the above occurs, the day-to-day activities and business of the department must continue (e.g., enrolling applicants in the Hotel Incentive Program, business communications, etc.) as well as developing other policy updates that emerge from regulatory review of department activities. For example, the Façade Program will likely require policy updates which in turn will require additional administration of the program.

So, to summarize, in CY 2026/2027, the department will manage:

1. EDSF Implementation Activation Strategies;

2. Oversight, management and tracking of EDSF action items; and,

3. Day-to-day Economic Development activities in business retention, expansion and attraction (i.e., program administration, business communications, etc.).

D – Page 210 of 263

City Council Staff Report
February 25, 2026 -- Page 4
Update on Economic Development Strategic Framework Implementation Planning 7 3
2 Role of the Consultant
CVL Economics will serve as the lead implementation consultant, working closely with the Office of Economic Development and other City departments. The consultant’s role is focused on project management, policy and program design, facilitation of interdepartmental coordination, and preparation of implementation-ready materials that can be carried forward by City staff and to Council for review as required.

ENVIRONMENTAL ASSESSMENT:

The requested action is not a “project” as defined by the California Environmental Quality Act (CEQA). Pursuant to CEQA Guidelines Section 15378(b), organizational or administrative activities of government that do not result in direct or indirect physical changes to the environment are not considered projects subject to CEQA.

ALIGNMENT WITH STRATEGIC PLANNING:

Citywide Goal: Economic Development - support a vibrant economy, including tourism, and new and existing businesses
FISCAL IMPACT:

The Office of Economic Development budget was increased by City Council $500,000 in each of FY26 and FY27.

In Attachment B you will see an update of fiscal activity of the Office of Economic Development in support of furthering the Vision and Principles of the EDSF. Business retention, expansion and attraction grants and sponsorships were made in consultation with the City Manager’s office along with evaluation of the overall economic impact of the requesting entity.

Moving forward, staff is working with the City Attorney’s office to bring forward a formal EDSF Business Retention Expansion and Recruitment grantmaking program sometime later this year. During the program’s development, staff is using metrics based in population, media reach, as well as general business impact to the community. These dollars are discrete in FY26 and FY27. As a result, FY26 agreements are coming to a close but will include those listed under “earmarked” on Attachment B.

REVIEWED BY:

Department Director: Wayne Olson
City Manager: Scott Stiles

D – Page 211 of 263

City Council Staff Report
February 25, 2026 -- Page 4
Update on Economic Development Strategic Framework Implementation Planning 7 3
2 D – Page 212 of 263

City Council Staff Report
February 25, 2026 -- Page 5
Update on Economic Development Strategic Framework Implementation Planning 7 3
2 ATTACHMENTS:

A. Economic Development Strategic Framework
B. CVL Economics – EDSF Implementation Proposal and Economic Development list of fiscal activities

D – Page 213 of 263

Attachment A
Economic Development Strategic Framework

D – Page 214 of 263

1 PALM SPRINGS ECONOMIC DEVELOPMENT STRATEGIC FRAMEWORK: A BLUEPRINT FOR MODERN INNOVATION, SUSTAINABLE GROWTH, AND COMMUNITY WELL-BEING NOVEMBER 05, 2025 • VERSION 2 EXECUTIVE SUMMARY Palm Springs finds itself at a defining moment. What began as success—a powerful brand, thriving tourism, cultural cachet—has created new pressures that threaten long-term viability. The city's economic foundation rests on a narrow set of industries, its workforce and housing markets are out of balance, and its infrastructure is strained by climate, cost, and growth. Between its celebrated past and uncertain future, Palm Springs faces a choice that goes beyond economics. The question is not whether the city will change; external forces guarantee that it will. The question is whether Palm Springs will direct that change or be reshaped by it. This framework argues for the former: a deliberate, community-driven transformation that preserves what makes Palm Springs distinctive while building the fiscal and organizational capacity to meet 21st-century challenges. The Economic Development Strategic Framework (EDSF) charts a decade-long path to rebalance the local economy, strengthen public capacity, and reimagine the city as a year-round hub for creativity, health, and innovation. This is not about abandoning Palm Springs' identity. It is about reclaiming the experimental, forward-looking spirit that created that identity in the first place. Developed through extensive stakeholder engagement (including interviews with business leaders, multiple surveys, several community meetings, and collaboration with regional partners) this framework reflects both data-driven analysis and community priorities. The EDSF organizes the city's approach around five guiding principles, each crafted to directly address a core structural challenge:1 PROBLEM RESPONSE OUTCOME Principle A: Expand the City's economic development capacity Limited capacity to manage growth: City systems, permitting processes, and administrative coordination have not kept pace with development demands, slowing investment and eroding confidence.

Strengthen internal capacity, digital systems, and interdepartmental coordination to improve service delivery, accelerate project timelines, and enhance accountability.

A city that operates at the speed of business—efficient, transparent, and responsive.

Principle B: Reinvigorate the business climate Fragmented business environment: Entrepreneurs and investors face a fragmented landscape — Create a unified business environment through targeted incentives, technical assistance, and partnerships A more dynamic, inclusive, and growth-oriented business ecosystem that supports both small 1 The framework encompasses 93 specific actions across three implementation phases: 38 short-term actions (1-2 years), 43 medium-term actions (3-5 years), and 22 long-term transformational investments (5-10 years).

D – Page 215 of 263

2 limited incentives, inconsistent communication, and uneven access to resources. with chambers, tourism organizations, and Tribal enterprises. enterprises and strategic investment.

Principle C: Bolster core industries Overreliance on tourism: Palm Springs' economic base is overly reliant on tourism, hospitality, and events, leaving the city vulnerable to seasonality and shocks.

Modernize the tourism and cultural economy by expanding group business, live performance, and nighttime activity; leverage arts, design, and LGBTQ+ identity as competitive advantages.

A year-round economy rooted in creativity, experience, and cultural distinction.

Principle D: Seed and nurture emerging clusters Underdeveloped emerging sectors: The city's future-facing industries — health, wellness, creative technology, and climate innovation — remain underdeveloped due to limited coordination and educational pathways.

Partner with colleges, health providers, and private investors to grow new clusters in creative economy, climate adaptation, and healthcare and wellness technology, and; align training and workforce programs with these sectors.

A diversified economy that offers higher-wage jobs, attracts next-generation talent, and strengthens regional competitiveness.

Principle E: Strengthen community assets and infrastructure Strained infrastructure and livability: Rising housing costs, transportation gaps, and heat exposure threaten livability, workforce retention, and business continuity.

Invest in workforce housing, multimodal mobility, renewable energy, broadband, and shade infrastructure to support year-round activity.

A city built for the future—equitable, connected, and resilient in the face of climate and demographic change.

These five principles are interdependent: institutional capacity enables business growth; business growth funds infrastructure; infrastructure supports emerging industries; and emerging industries create the year-round economy that strengthens the city's core assets. The result is a future where Palm Springs is not only a world-class destination, but a community where residents can build lives, careers, and belonging. WHAT SUCCESS REQUIRES This framework will succeed or fail based on three factors that transcend policy design: § INSTITUTIONAL WILL: The City must maintain focus across electoral cycles, staff transitions, and competing priorities. Economic development operates on timelines that exceed political calendars, and momentum lost is rarely recovered. § RESOURCE ALIGNMENT: Many initiatives in this framework require no new funding—only coordination and reprioritization. Others demand significant investment. The City must make

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3 hard choices about where to deploy limited capital and staff capacity, recognizing that attempting everything guarantees achieving nothing. § COMMUNITY TOLERANCE FOR EXPERIMENTATION: Not every initiative will succeed. Some partnerships will disappoint. Some businesses will fail despite support. The framework's value lies not in eliminating risk but in creating systematic approaches to manage it. Progress requires permission to try, fail, learn, and adjust. THE PATH FORWARD Together, these principles form a cohesive strategy: build institutional capacity, unlock business growth, elevate cultural assets, diversify into emerging industries, and sustain livability. The framework comprises 21 initiatives and 93 actions, each with defined timelines, lead entities, and measurable outcomes. Early wins in years 1-2 will build momentum; sustained progress in years 3-5 will establish new programs; and transformational investments in years 5-10 will define Palm Springs' economic future. Palm Springs once led the world in redefining modern living. With this framework, it can do so again—not by recreating mid-century optimism, but by applying that era's experimental spirit to contemporary challenges. The city that pioneered new ways of living in the desert can pioneer new models for economic resilience, climate adaptation, and inclusive prosperity. But only if it acts with the same courage that built its reputation in the first place.

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4 INTRODUCTION In 1963, architect Albert Frey designed a house that seemed to float impossibly above the desert floor, its steel frame and glass walls framing the San Jacinto Mountains like a living photograph. The structure embodied everything Palm Springs represented: bold innovation, seamless integration with the natural environment, and an unwavering belief that thoughtful design could transform how people lived. The house still stands today, a testament to Palm Springs' identity as fundamentally rooted in modernism—an approach that celebrates the power of human beings to create, improve, and reshape their environment through practical experimentation, scientific knowledge, and technology. Palm Springs emerged into the public consciousness in the 1930s as a glamorous escape for Hollywood stars, but there was so much more incubating behind that facade. What started as a convenient desert retreat evolved into America's first experiment in modern living, where venues like the Chi Chi Club and Racquet Club the alongside Frank Sinatra's Twin Palms residence signaled a place where culture, leisure, and new ways of life converged. By the mid-century, Palm Springs had blossomed into the undisputed capital of American modernism. The movement's core principles—infectious optimism, function-driven design, and democratic accessibility—found their fullest expression in the desert city's architecture and lifestyle. This embodied a radical belief that good design could democratize comfort and connect people more deeply to their environment as well as to each other. That legacy made Palm Springs a global icon, not just in design circles, but among the LGBTQ+ community, outdoor enthusiasts, and creatives of all stripes. [See CALLOUT BOX #1 on Page 13]. Yet a cultural brand alone does not translate to sustained economic prosperity, and a sense of complacency eventually set in. Over time the city shifted toward a tourism-dominated economy, leaving behind much of the innovation ethos that fueled its rise. Today, Palm Springs stands at a crossroads. If mid-century modernism was born from a desire for renewal, reinvention, and progress in the post-war era, that same philosophy must be embraced as the city faces significant contemporary challenges. Palm Springs can remain a showcase of mid-century dreams or reassert itself as a living laboratory for redesigning modern life. This strategy seeks to rekindle the city's founding spirit—not by preserving it in amber, but by building a resilient economy, modernizing its systems, and creating space for a new generation of thinkers and creators to redefine what the good life looks like in the desert. PURPOSE In 2024, the Palm Springs City Council approved a motion to produce the city’s first Economic Development Strategic Framework (EDSF) under the direction of its newly appointed Chief Economic Development Officer [CALLOUT BOX #2]. This initiative emerges from a critical need to shift from reactive governance to proactive leadership. The city must address the multifaceted challenges that have emerged in recent years through coordinated, strategic action rather than constant crisis management.

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5 The framework provides an overarching vision for Palm Springs' short-, medium-, and long-term future, serving as a coordination mechanism among public and private sector entities, regional bodies, and residents. The development of the EDSF represents a collaborative and systematic process designed to set priorities, allocate resources, and develop policies, programs, and initiatives that improve resident wellbeing while promoting sustainable growth. Rather than accepting the constraints of the current economic model, this framework charts a path toward diversification, innovation, and year-round vitality that honors Palm Springs' unique character while preparing it for future challenges. WHY NOW? Palm Springs faces mounting pressures that threaten its long-term economic viability and stability. While the city benefits from a strong identity as a premier leisure destination, these pressures—ranging from housing and workforce issues to climate change, business conditions, and regional competition—underscore the urgent need for comprehensive strategic planning: § ECONOMIC CONCENTRATION AND VULNERABILITY: Palm Springs' economy continues to rely heavily on tourism, hospitality, and events. While these sectors remain pillars of the city's identity, overdependence exposes Palm Springs to seasonal volatility and external shocks such as recessions, pandemics, and shifts in travel patterns. In a survey of Palm Springs businesses conducted in the summer of 2025, 82% of respondents said tourism is important to their bottom line, with 68% stating that tourism was either “essential” or “very important”. This concentration limits resilience and constrains opportunities for year-round economic stability. [CALLOUT BOX #3] § EVOLVING MARKET DYNAMICS: Travelers' preferences continue to evolve toward flexible, experience-driven offerings, while competing destinations both in the Coachella Valley and beyond are innovating to capture these markets. Both vacation rentals and hotels showed declining tax revenue in May 2025. Short-term rental taxes dropped to $942,525, nearly $160,000 below the prior year and the lowest collection in five years. Hotel taxes, at approximately $3 million, fell to their weakest level in four years. Without strategic adaptation, Palm Springs risks losing market share to more agile competitors. § CHALLENGING BUSINESS ENVIRONMENT: Local businesses frequently cite difficulties navigating permitting, compliance, and regulatory processes. Over two-thirds (68%) of respondents in the business survey stated they have difficulty navigating permitting or licensing requirements, and 50% said the high costs associated with regulatory compliance were major challenges. Complex rules and overly restrictive policies slow expansion, discourage entrepreneurship, and place Palm Springs at a competitive disadvantage compared to neighboring cities with more streamlined systems. This regulatory burden undermines the city's ability to retain existing businesses and attract new investment. § HOUSING CRISIS AND WORKFORCE CHALLENGES: Housing costs increased by 83% between 2018 and 2023, fueled in part by demand for short-term rentals and speculative investment, while

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6 wages rose by just under 30%. Many workers are priced out of living local—the median home price in Palm Springs exceeds $1.0 million, compared to an average annual wage of around $46,000—creating persistent labor shortages, long commutes, and retention issues across key industries. Indeed, only 15.5% of Palms Springs workers actually live in Palm Springs. This housing-workforce disconnect threatens the sustainability of the local economy and quality of life for residents. § CLIMATE AND ENVIRONMENTAL PRESSURES: Extreme heat, drought, and rising energy costs present pressing concerns for residents, businesses, and the tourism sector alike. These climate-driven challenges threaten livability, increase operational costs, and require proactive investment in resilience and sustainability infrastructure. [CALLOUT BOX #4] § REGIONAL COMPETITION: Nearby cities are pursuing aggressive economic development strategies, investing in new infrastructure, and cultivating reputations as business-friendly hubs. Without a comprehensive plan, Palm Springs risks losing investment, talent, and visitors to regional competitors who are actively courting these opportunities. § DEMOGRAPHIC TRANSITIONS: An influx of retirees, remote workers, and creative professionals is reshaping Palm Springs' economic and social landscape. While these groups bring new opportunities, they also increase housing demand and reveal gaps in career pathways for younger residents and mid-career workers seeking local employment. [CALLOUT BOX #5]. § INFRASTRUCTURE DEFICITS: Aging infrastructure, limited mobility options, and uneven downtown recovery remain barriers to inclusive growth. Strategic investment and coordination are needed to ensure revitalization benefits both residents and small businesses while supporting broader economic development goals. § EXTERNAL UNCERTAINTIES: Finally, ongoing economic and policy uncertainty at the national level continue to create ripple effects in Palm Springs, influencing international tourism, driving up costs, and reshaping workforce availability in hospitality. These external pressures underscore the need for strong local and regional strategies to build resilience. Together, these pressures make clear that Palm Springs cannot rely on past strengths alone to secure its future. The city must act with urgency to diversify its economic base, modernize its operations, and create conditions that support year-round stability for residents, businesses, and visitors alike. UNDERSTANDING TRADE-OFFS To address these challenges effectively, stakeholders must acknowledge that meaningful progress requires difficult tradeoffs. Improving economic and social conditions for residents, workers, and businesses will not be possible without deliberate efforts to promote growth and development. Palm Springs confronts fiscal deficits and structural revenue constraints that limit its ability to invest in

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7 infrastructure, housing, and quality-of-life improvements. Simply maintaining the status quo will not generate the resources necessary to tackle rising costs, climate adaptation, or workforce retention. The reality is stark: without proactive economic development, Palm Springs will lack the fiscal capacity to address its most pressing challenges. Housing affordability, infrastructure modernization, climate adaptation, and workforce development all require substantial public and private investment. These investments can only be sustained through a more diversified, resilient economic base that generates revenue throughout the year rather than relying primarily on seasonal tourism. [CALLOUT BOX #6] Expanding the city's revenue base is therefore essential, and stronger fiscal health cannot be achieved without embracing change. This means making strategic choices about land use, business regulations, and regional partnerships; welcoming new industries alongside tourism; and balancing preservation of Palm Springs' unique character with the flexibility needed to adapt to a shifting economy. By facing these tradeoffs directly, the city can chart a course that secures fiscal stability, strengthens resilience, and ensures long-term prosperity for the entire community. The alternative—maintaining the status quo while hoping external pressures will diminish—risks further erosion of the city's competitive position and, by extension, overall well-being. MAPPING THE PLANNING PROCESS The economic development strategic planning process began in September 2024 and spanned several distinct phases, each designed to gather comprehensive input and build consensus around strategic priorities. The process followed a systematic methodology that combined quantitative analysis with extensive stakeholder engagement to ensure the resulting plan reflects both data-driven insights and community priorities. The process began with a document review and several rounds of data analysis, which examined existing plans, policies, and economic indicators to establish baseline conditions. This phase included analysis of demographic trends, economic performance metrics, fiscal conditions, and regional comparative data to understand Palm Springs' current position and trajectory. Interviews and focus groups represented the core of the preliminary stakeholder engagement process, involving dozens of conversations with business leaders, residents, city staff, elected officials, and regional partners. These discussions identified key challenges, opportunities, and priorities from multiple perspectives, ensuring the plan addresses real-world concerns and builds on existing assets. The Office of Economic Development also administered surveys to local businesses and residents to capture broader community perspectives on economic challenges and opportunities. Additional surveys were conducted with participants at major Palm Springs events including Greater Palm Springs Pride Festival, Modernism Week, and VillageFest to understand visitor experiences, spending patterns, and perceptions of the city's economic offerings.

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8 Findings from previous phases were finally synthesized into a coherent framework of principles, initiatives, and actions, with clear timelines and implementation pathways (see the “Strategic Framework Plan” that follows this narrative). This phase included examination of successful economic development strategies from comparable communities, identifying innovative approaches and proven methodologies that could be adapted to Palm Springs' unique context and challenges. Central to the strategic planning effort was the development of a comprehensive SWOT (strengths, weaknesses, opportunities, and threats) analysis. By examining internal advantages and limitations alongside external trends and risks, it provides a balanced picture of the factors shaping Palm Springs’ economy and identifies where the city can build on existing assets, address vulnerabilities, and position itself to seize emerging opportunities while mitigating potential challenges. Key stakeholder insights that frequently emerged included the following: § STRENGTHS: Palm Springs has a powerful brand and established tourism infrastructure that money can't buy. The airport connects directly to major markets. Festivals and cultural events create year-round activity. Demographic diversity and outdoor recreation access enhance quality of life for residents and visitors. § WEAKNESSES: Housing costs are pricing out essential workers. Tourism dependence creates seasonal volatility. Business owners cite permitting and regulatory challenges that neighboring cities have largely solved. Limited public transit and aging infrastructure constrain growth potential. § OPPORTUNITIES: Business tourism represents immediate revenue potential. Technology ecosystem development can capitalize on remote work trends. Creative economy initiatives can leverage the city's cultural assets. Regional partnerships can address shared challenges while reimagined zoning can unlock development potential. § THREATS: Climate change impacts are accelerating. Regional competition is intensifying. Consumer preferences continue shifting toward flexible, experience-driven options. Limited public sector capacity and fiscal pressures constrain response options. In short, the SWOT analysis reveals a city at an inflection point. Strengths provide a foundation for growth, but weaknesses and threats are gaining ground. The window for proactive change is open, but it won't stay open indefinitely. DEVELOPING THE STRATEGIC FRAMEWORK Building on SWOT analysis insights, the EDSF translates identified strengths, weaknesses, opportunities, and threats into a clear set of initiatives and actions across short-, medium-, and long-term time horizons. The framework's purpose is to provide an actionable roadmap that responds to immediate challenges while positioning Palm Springs for long-term, inclusive prosperity. Organized around five guiding

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9 principles, the framework balances the need to strengthen core industries with the imperative to diversify into emerging sectors, while enhancing community assets and institutional capacity: § PRINCIPLE A: EXPAND THE CITY'S ECONOMIC DEVELOPMENT CAPACITY focuses on building the organizational foundation necessary for effective economic development. This includes aligning city resources, modernizing policies and regulations, strengthening cross-departmental coordination, and developing the staffing and partnerships needed to implement ambitious economic development initiatives. § PRINCIPLE B: REINVIGORATE THE BUSINESS CLIMATE emphasizes creating conditions that support business formation, expansion, and retention. Key elements include streamlining permitting processes, expanding financial incentives for priority industries, establishing designated business districts, supporting nighttime economy development, and improving business resilience through emergency preparedness and recovery assistance. § PRINCIPLE C: BOLSTER EXISTING INDUSTRIES builds strategically on Palm Springs' established strengths in tourism, arts and culture, and hospitality. Rather than simply maintaining these sectors, this principle focuses on enhancing visitor experiences, leveraging key assets like the Convention Center and airport expansion, and developing Palm Springs' position as a premier destination for business tourism and cultural experiences. § PRINCIPLE D: SEED AND NURTURE EMERGING CLUSTERS represents the plan's most ambitious economic diversification component. This principle focuses on developing interconnected industry clusters in technology, climate innovation, health and wellness, and the creative economy. By leveraging geographic advantages, quality of life assets, and emerging remote work trends, these initiatives aim to create sustainable, year-round economic opportunities through cross-sector collaboration and inclusive growth strategies. § PRINCIPLE E: STRENGTHEN COMMUNITY ASSETS AND INFRASTRUCTURE recognizes that sustainable economic development requires supportive infrastructure and quality of life amenities. This principle addresses essential foundations including multimodal transportation, climate-adaptive infrastructure, expanded housing options with emphasis on workforce housing, upgraded telecommunications capabilities, enhanced energy resilience, and vibrant public spaces that support both community life and economic activity. The framework's five principles are divided into 21 initiatives, each with their own set of actions organized by implementation timeline: 38 short-term actions (1-2 years) provide immediate momentum and demonstrate progress, 43 medium-term actions (3-5 years) build capacity and establish new programs, while 22 long-term actions (5-10 years) represent transformational investments and institutional changes that will define Palm Springs' economic future. This comprehensive approach ensures that immediate needs are addressed while building toward long-term transformation, creating a balanced strategy that can adapt to changing conditions while maintaining focus on core objectives of economic diversification, fiscal sustainability, and inclusive prosperity.

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10 WHAT DOES SUCCESS LOOKING LIKE? A strategic framework should answer not just "what will we do?" but "what will be different?" The initiatives outlined in this framework span a decade and touch every aspect of Palm Springs' economy. To understand their cumulative impact, it helps to see them not as a checklist but as a transformation unfolding in stages—each phase delivering visible improvements while laying groundwork for what comes next. § YEARS 1-2: THE FOUNDATION | The first changes are practical but consequential. Business owners log into a redesigned permitting portal that cuts approval times from months to weeks, discover tax incentives explained in plain language, and access pre-approved permit packages for common business types. An entrepreneur pitches to a new angel investor network and secures early-stage funding. City Hall operates differently—an internal task force coordinates economic development across departments, and studies launch on workforce housing, heat resilience, and technology ecosystems, replacing guesswork with data. The Convention Center District gets formally defined through zoning updates. College of the Desert begins training programs for virtual production specialists and renewable energy technicians—jobs that don't exist in Palm Springs yet but will soon. The airport announces terminal expansion plans while Visit Greater Palm Springs secures commitments for new air routes. These aren't transformative yet, but the signal is clear: Palm Springs is building capacity to move at the speed of business. § YEARS 3-5: THE STRUCTURE | The investments compound visibly. The airport expansion opens with new direct routes extending the tourism season and bringing year-round business travelers. A graduate from new medical assistant training earns $23/hour at expanding healthcare facilities, made viable by workforce housing projects breaking ground citywide. Palm Canyon Drive transforms with complete streets—shade structures, wider sidewalks, better lighting—while an Entertainment Zone activates evening business. The Convention Center District hums with coordinated improvements and midweek bookings climb 35%. Streamlined permitting makes development predictable. A creative technology hub, climate innovation showcase, and arts accelerator open their doors. Innovation fund grants bridge startup financing gaps. The Office of Economic Development expands from one person to a full team managing partnerships across sectors. Summer no longer means shuttered businesses—nighttime incentives and climate-adapted programming create year-round vitality. § YEARS 5-10: THE LEGACY | By decade's end, transformation is undeniable. The airport's expanded terminal handles international traffic. A health innovation campus attracts medical tourists from Canada and Europe. A climate tech company with 50 employees has chosen Palm Springs for its headquarters, drawn by talent pipelines and renewable energy infrastructure. The Convention Center anchors a mixed-use district where conference attendees walk to restaurants and immersive evening experiences. Digital infrastructure upgrades support remote workers and tech businesses. Workforce housing near employment centers has stabilized labor markets. A high school senior faces a choice her older siblings didn't have: leave for opportunities elsewhere, or stay and build a career in health care, technology, or creative industries that didn't

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11 exist when they graduated. That choice—the ability to build a life in Palm Springs beyond serving tourists—is the clearest measure of success. What hasn't changed: Palm Springs' identity is stronger than ever. Modernism Week, Greater Palm Springs Pride, and the LGBTQ+ community that defined the city's character continue to shape its economy and culture. The difference is that this foundation now supports an economy diverse enough to weather any shock. UNDERSTANDING THE RISKS This narrative is ambitious by necessity, and ambition carries risk. Not every initiative will succeed on the proposed timeline. Some partnerships may take longer to form than anticipated. Market conditions may shift. Political priorities may change. These are not reasons to avoid action—they are reasons to build adaptability into implementation. The framework balances quick wins (permitting reforms, business incentives) with longer-term bets (innovation campuses, new industry clusters). Early initiatives are designed to demonstrate progress and build momentum while the city develops capacity for more complex work. The goal of this framework is not to eliminate uncertainty but to manage it deliberately, acknowledging where obstacles are likely to arise and building the adaptive capacity to respond. If not proactively managed, impediments to progress may include: § INSTITUTIONAL RISKS: Implementation depends on consistent leadership, dedicated staff, and stable funding. Changes in priorities, turnover, or constrained budgets could slow progress. Strengthening interdepartmental coordination, diversifying revenue streams, and pursuing state, federal, and private partnerships will help sustain momentum. § ECONOMIC RISKS: Broader economic forces—rising costs, tourism shifts, or downturns—could alter project timelines and feasibility. Building flexibility into implementation, prioritizing quick wins, and stress-testing major investments against multiple scenarios will help maintain resilience. § COORDINATION RISKS: Many initiatives require collaboration with regional partners such as Visit Greater Palm Springs, SunLine Transit, and the Coachella Valley Association of Governments. Misalignment of priorities or unclear accountability could hinder progress. Establishing formal agreements and shared metrics can reduce this risk. § POLITICAL RISKS: Growth and change may generate public concern, particularly around affordability, housing, and preservation of local character. Transparent communication, visible early successes, and opportunities for residents to shape implementation will be essential for maintaining trust and support. § EQUITY RISKS: Without intentional design, new economic growth could bypass historically underserved communities and deepen disparities. Workforce programs, housing initiatives, and small-business supports must be structured to ensure broad access to opportunity and prevent further economic polarization.

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12 MOVING FORWARD The path ahead requires more than good intentions—it demands collective action from every corner of the Palm Springs community. This strategic framework provides direction, but success depends on businesses willing to invest in local workforce development, residents who support balanced growth that strengthens the fiscal foundation, city leaders who prioritize implementation over politics, and regional partners who recognize shared challenges require coordinated solutions. By embracing the opportunities outlined in the following pages, Palm Springs can position itself as a model for cities facing similar challenges nationwide and around the world. It has the chance to pioneer climate-adaptive tourism, demonstrating how destinations can remain vibrant even as rising temperatures challenge the global travel industry. It can show how a community can evolve from a tourism-dependent economy to an innovation-driven economy that amplifies and complements its hospitality strengths rather than replacing them. Most importantly, it can illustrate how cultural and historical preservation can coexist with progress, ensuring that Palm Springs' unique identity is safeguarded while the city adapts to an evolving economic landscape. The modernist pioneers who shaped Palm Springs in the 1940s and 1950s didn't simply preserve what came before—they imagined something better and built it. They understood that respecting the past while embracing the future requires courage, creativity, and collaboration. Today's challenges are different, but the opportunity for transformational thinking remains the same. Economic development isn't a zero-sum game where growth comes at the expense of community character. Done thoughtfully, it can strengthen what residents value most: quality of life, cultural vibrancy, and fiscal stability that supports essential services. The choice isn't between change and preservation—it's between strategic change that serves community priorities or reactive change imposed by external forces. Palm Springs has the assets, the expertise, and the community engagement to succeed. The strategic framework provides direction. The timeline creates urgency without unrealistic expectations. The only missing ingredient is sustained commitment from stakeholders across the community to turn these plans into reality. This desert city that once pioneered modern living can pioneer sustainable, inclusive economic development for the 21st century. But that future won't create itself; it requires the same bold experimentation and collaborative spirit that built Palm Springs' original reputation as a place where innovation and the good life thrive.

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13 CALLOUT BOXES 1. IDENTITY AS INFRASTRUCTURE: Palm Springs' cultural significance extends far beyond architecture. The city's LGBTQ+ identity represents its most distinctive competitive advantage—a joyful, creative, and inclusive community that attracts visitors, workers, and businesses seeking authenticity and belonging. This is not merely a social characteristic; it is an economic differentiator that drives medical tourism, supports specialized healthcare services, anchors cultural festivals, and creates an environment where creativity and innovation thrive. Any economic strategy that overlooks this asset risks losing what makes Palm Springs irreplaceable. 2. WHY ECONOMIC DEVELOPMENT MATTERS: Economic development is how a city builds the foundation for long-term success. It is not a single program or department—it is the strategic approach dedicated to aligning a city’s businesses, workforce, land, infrastructure, and institutions toward a shared vision of opportunity. When done well, economic development ensures that progress in one area—housing, tourism, innovation—reinforces progress in others. For Palm Springs, expanding this capacity means moving from reaction to direction, from managing day-to-day challenges to intentionally shaping the city’s future. It is the work that makes every other kind of progress possible, turning creativity, investment, and collaboration into lasting public value. 3. FOUR SECTORS, HALF THE ECONOMY: More than half of Palm Springs' jobs concentrate in just four industries. three are growing: healthcare (+10.3% over four years, averaging $43,516) and government (+52.2%, averaging $79,938), and retail trade (+8.6%, averaging $38,082). However, the government sector's recent growth is unlikely to continue—revenue constraints and fiscal pressures will limit public sector expansion in the coming years. And while retail trade jobs may be on the rise, their low wages and seasonal nature do not provide strong economic security for industry workers. Meanwhile, the city’s second largest sector, accommodation and food services, contracted by 13.2% between 2019 and 2023, and worked only earned $32,620 in annual wages on average. When a city's economic foundation rests on four sectors—two of which pay below-median wages and face headwinds, and a third constrained by budget realities—a single shock can ripple through the entire workforce. This concentration amplifies the case for strategic diversification.

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14 4. THE CLIMATE INFLECTION POINT: For four decades (1950-1990), Palm Springs experienced relatively stable extreme heat patterns—averaging 40-60 days per year with occasional spikes. Then, around 2000, the pattern shifted permanently. Extreme heat days jumped to 80-110 annually and have remained elevated ever since. This represents a fundamental change in Palm Springs' climate baseline, not cyclical variation. Businesses designed for 50 days of extreme heat now operate in an environment with twice that exposure. Economic development strategy must account for this new reality through infrastructure investment, programming adaptation, and industry diversification that works WITH extreme heat rather than against it. 5. A GRAYING ECONOMY: Palm Springs' age distribution diverges sharply from regional norms, creating both significant opportunity and urgent challenges. With nearly 40% of residents aged 65+—double Riverside County's rate—Palm Springs has one of the oldest populations in Southern California. While Riverside County's largest cohorts fall in the prime working years (40-54), Palm Springs concentrates heavily in the 70-84 age range, with the 70-79 cohort alone representing roughly 20% of the city's population. This demographic reality creates substantial economic opportunity. As 11,000 Americans turn 65 daily, demand for specialized healthcare, senior living, wellness services, and aging-in-place solutions will only intensify. But the opportunity comes with a structural challenge: Palm Springs shows a pronounced shortage of residents in their prime working years (25-44), the very cohort needed to staff healthcare facilities, hospitality businesses, and service industries that serve an aging population. Without strategic intervention (namely, workforce housing, career pathways, family-friendly amenities) Palm Springs risks becoming a retirement community unable to staff its own service economy. Economic diversification must simultaneously capture the silver economy opportunity while creating conditions that attract and retain younger workers essential to sustaining it.

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15 6. THE FISCAL ROLLERCOASTER: Palm Springs' largest revenue source—transient occupancy tax from hotels and short-term rentals—swings wildly year to year. After plummeting to $32 million during the pandemic, TOT revenue spiked to $62 million in FY2021-22, then declined to $51 million by FY2024-25. These $10-30 million swings make long-term capital planning nearly impossible. Meanwhile, property tax—the most stable revenue source—has remained essentially flat at $31 million for seven years despite inflation and growing infrastructure needs. Aggregate tax revenue in FY2024-25 sits at $190 million in inflation-adjusted dollars—barely above pre-pandemic levels despite rising costs for climate adaptation, workforce housing, and infrastructure modernization. This volatility and stagnation explain why diversification isn't optional: the City cannot fund 21st-century challenges with a revenue base stuck in 2018.

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16 HOW TO USE THIS DOCUMENT This Economic Development Strategic Framework is organized as a hierarchical structure designed to connect high-level vision with specific, actionable steps. Understanding this structure will help you navigate the document and see how individual actions contribute to broader economic goals. * * * Strategic Framework: The overarching structure that organizes the framework's vision, principles, initiatives, and actions into a coherent roadmap for advancing the Palm Springs economy. The framework provides the "big picture" and shows how different components work together. Principles: Five high-level goals that define what the City seeks to achieve in support of economic development. Each principle addresses a core need or opportunity: § Principle A: Expand the City's Economic Development Capacity § Principle B: Reinvigorate the Business Climate § Principle C: Bolster Core Industries § Principle D: Seed and Nurture Emerging Clusters § Principle E: Strengthen Community Assets and Infrastructure Initiatives: Focused approaches or methods for achieving each principle's objectives. The framework contains 21 initiatives that outline the "how" and provide thematic direction to guide implementation. For example, under Principle B (Reinvigorate the Business Climate), initiatives include "Simplify permitting and improve ongoing engagement with the business community" and "Expand incentives for businesses in priority industries." Actions: Specific, practical steps that implement each initiative. Actions are time-bound, measurable, and designed to drive tangible progress. The framework includes 93 actions distributed across three time horizons: § S | Short Term (1-2 years): 38 actions that provide immediate momentum and demonstrate progress § M | Medium Term (3-5 years): 43 actions that build capacity and establish new programs § L | Long Term (5-10 years): 22 actions representing transformational investments and institutional changes Each action in the Strategic Framework section includes a designated time horizon and identifies a lead entity responsible for implementation. This structure allows readers to understand both the strategic intent behind each action and the practical steps required to achieve it.

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17 THE ECONOMIC DEVELOPMENT STRATEGIC FRAMEWORK VISION: Palm Springs aims to build an economic ecosystem that blends its legacy as a world-class tourism destination with emerging opportunities in technology, sustainability, and the creative sectors. By developing climate-resilient infrastructure, cultivating year-round economic activity, and promoting a business-friendly environment, Palm Springs will transform into a diverse, export-oriented economy where established local industries thrive alongside innovative clusters with global reach. This balanced approach will enhance the city's distinctive character while creating equitable opportunities and increased quality of life for residents of all ages, sustainable prosperity for businesses, and superlative experiences for visitors during both peak and off-peak seasons. PRINCIPLE A: EXPAND THE CITY’S ECONOMIC DEVELOPMENT CAPACITY | PAGE 19 Expanding economic development capacity involves aligning city resources, strengthening organizational infrastructure, and enhancing cross-departmental coordination. Improvements to regulatory frameworks, dedicated staffing investments, and public-private partnerships will build a strategic foundation for proactively shaping the city's economic future. Initiative A1: Streamline City services and permitting processes Initiative A2: Modernize municipal code and land use policies to support economic development Initiative A3: Develop internal coordination mechanisms and build staffing pipeline Initiative A4: Launch economic development website and marketing campaign Initiative A5: Scale economic development beyond City-funded staffing and investments PRINCIPLE B: REINVIGORATE THE BUSINESS CLIMATE | PAGE 23 Barriers to entry will be reduced while expanding economic incentives to foster a resilient commercial environment during both peak and off-peak seasons. Streamlined permitting processes, support for priority industries, enhanced nighttime business opportunities, and targeted marketing efforts will attract new businesses while strengthening existing enterprises throughout Palm Springs. Initiative B1: Improve ongoing engagement with the business community Initiative B2: Expand incentives for businesses in priority industries Initiative B3: Establish designated business districts and support policies Initiative B4: Support and expand nighttime business opportunities Initiative B5: Improve business resilience through emergency preparedness, mitigation measures, and recovery assistance PRINCIPLE C: BOLSTER CORE INDUSTRIES | PAGE 27 Strengthening the tourism, arts and culture, and hospitality sectors remains a continued priority through expanded visitor engagement options and a commitment to promoting the city as an inclusive and

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18 experiential destination. By leveraging key infrastructure investments, these initiatives will build upon existing foundations to support long-term growth while reinforcing Palm Springs' unique character and appeal. Initiative C1: Establish the Palm Springs Convention Center District Initiative C2: Promote Palm Springs as a premier destination for business tourism Initiative C3: Strengthen and activate the Palm Springs arts and culture Ecosystem Initiative C4: Leverage Palm Springs International Airport expansion Initiative C5: Expand Palm Springs' roster of visitor attractions and hospitality businesses PRINCIPLE D: SEED AND NURTURE EMERGING CLUSTERS | PAGE 32 The plan envisions diversifying the local economy through interconnected industry clusters in technology, climate innovation, health and wellness, and the creative economy. Leveraging geographic advantages and quality of life, Palm Springs aims to become an innovation hub addressing desert-specific challenges while creating sustainable, year-round opportunities through cross-sector collaboration and inclusive growth. Initiative D1: Build a robust technology ecosystem in Palm Springs Initiative D2: Build equitable talent pipelines and educational pathways to support emerging industries Initiative D3: Establish Palm Springs as a health and wellness technology hub Initiative D4: Expand Palm Springs' creative technology footprint Initiative D5: Promote Palm Springs as an industry leader in desert climate and energy innovation Initiative D6: Develop innovation funds and financing mechanisms PRINCIPLE E: STRENGTHEN COMMUNITY ASSETS AND INFRASTRUCTURE | PAGE 37 Essential infrastructure supporting sustainable economic development requires enhancement through improved transportation options, innovative cooling solutions, and expanded housing accessibility. Upgraded telecommunications, bolstered energy resilience, and vibrant community spaces will create a more livable, connected community that attracts and retains businesses, workers, and residents. Initiative E1: Improve multimodal transportation, circulation, and walkability to drive economic growth Initiative E2: Design, promote, and install climate-adaptive infrastructure citywide Initiative E3: Expand housing options with emphasis on workforce housing and live-work spaces Initiative E4: Upgrade telecommunications infrastructure to support business and community needs Initiative E5: Create vibrant public spaces that support community and economic activity SUMMARY OF ACTIONS BY TIME HORIZON | PAGE 42

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19 PRINCIPLE A: EXPAND THE CITY’S ECONOMIC DEVELOPMENT CAPACITY These strategies focus on expanding Palm Springs’ economic development capacity by aligning city resources, strengthening organizational infrastructure, and enhancing coordination across departments and stakeholders. By improving regulatory frameworks, investing in dedicated economic development staffing, establishing a citywide calendar, and exploring the creation of an Economic Development Authority, these initiatives aim to build a more agile, strategic, and well-resourced foundation for long-term economic growth. Through these efforts, Palm Springs can better support businesses, attract investment, and proactively shape the city’s economic future. Initiative A1: Streamline City services and permitting processes To be an effective and responsive partner to the business community, City Hall must minimize procedural barriers to business development. Streamlined processes, digital systems, and specialized frameworks should provide City departments with efficient tools for consistent service delivery that support economic goals while maintaining necessary oversight. This alignment reduces friction between regulatory responsibilities and business formation, creating a municipal environment where compliance and growth operate as complementary rather than competing priorities. ACTION TIME HORIZON LEAD ENTITY Action A1.1: Conduct a system, process, and technology audit to improve City service delivery and minimize ongoing costs of doing business. S Action A1.2: Implement an internal digital business licensing and permitting system that improves application processing times, automates routine approvals, and creates a centralized database of business information. S Action A1.3: Consolidate requirements across departments, reduce excessive fees, and enhance permitting portal user-friendliness for business owners with real-time tracking and digital submission. M Action A1.4: Implement a program to accelerate approvals for businesses in priority sectors, especially those that bolster sales tax revenues and foster high-quality local employment opportunities. M

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20 Initiative A2: Modernize Municipal Code and land use policies to support economic development Modernizing the Municipal Code means identifying and removing unintentional regulatory barriers to development. This comprehensive approach addresses zoning, business regulations, and other ordinances that impact business attraction, formation, and operations. Updated codes, integrated incentives, and innovative land use policies provide clear direction for development decisions that support economic goals while maintaining community standards. This regulatory alignment reduces conflicts between Municipal Code requirements and economic objectives, creating an operating environment where regulations support rather than hinder business formation and growth. ACTION TIME HORIZON LEAD ENTITY Action A2.1: Conduct a review of existing Municipal Code to identify ordinances and regulations that inhibit the implementation of economic development priorities. S Action A2.2: Integrate development incentives into the zoning code to offset development fees and other costs impacting the feasibility of housing and commercial development. S Action A2.3: Develop an “accessory commercial unit” designation for specified residential-only districts where homeowners or permanent tenants can add a small-format food or retail shop on their property. S Action A2.4: Expand the Foreign Trade Zone to increase geographic coverage and eligibility, enhancing its capacity to attract investment and support trade-related industries M Initiative A3: Develop internal coordination mechanisms and build staffing pipeline Strengthening the City’s capacity to design and implement effective economic initiatives requires building cross-departmental capabilities and dedicated expertise. An internal economic development task force embeds an economic development lens throughout municipal operations, allowing departments to identify opportunities within their normal functions. Moreover, leveraging academic partnerships extend bandwidth currently beyond reach (enabling planning and implementation without dramatically increasing permanent overhead) until it is feasible to hire additional staff.

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21 ACTION TIME HORIZON LEAD ENTITY
Action A3.1: Establish an internal cross-departmental task force to embed economic development considerations into routine city operations and coordinate collaborative implementation of citywide economic development priorities. S Action A3.2: Partner with College of the Desert and regional universities to establish an economic development fellowship or internship program to channel advanced students into career-track public sector roles. M Action A3.3: Increase the size of the Office of Economic Development to scale operations as the department’s portfolio expands and the city’s economic base grows more diversified. M Initiative A4: Launch economic development website and marketing campaign The development of robust digital infrastructure transforms how City staff communicate economic opportunities to the public and respond to business needs. A comprehensive online platform reduces repetitive information requests (making routine information self-service), provides 24/7 access to resources, and creates consistent frameworks for presenting economic data across departments. Moreover, a strategic marketing campaign will showcase Palm Springs' competitive advantages to investors, entrepreneurs, and talent while educating residents about economic development services. ACTION TIME HORIZON LEAD ENTITY Action A4.1: Develop digital toolkits that provide step-by-step guidance for businesses at every stage as well as workforce development resources that connect residents with emerging job opportunities. S Action A4.2: Draft public education materials to inform residents, local businesses, and workers about the Office of Economic Development's services, programs, and resources. S

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22 Action A4.3: Develop and implement a comprehensive economic development marketing strategy and brand identity to highlight Palm Springs' competitive advantages and attract priority industries, businesses, investors, and talent. M Action A4.4: Build an interactive and publicly accessible data dashboard with regularly updated metrics on key economic indicators, business activity, and development trends. M Initiative A5: Scale economic development beyond City-funded staffing and investments Effective economic development requires capabilities and resources that often exceed municipal capacity. By creating strategic partnerships, specialized financing mechanisms, and dedicated authorities with expanded powers, the City can dramatically extend its economic development reach and amplify impact. By allowing the Office of Economic Development to operate with a more expansive toolkit, these capacity-building mechanisms enable Palm Springs to pursue ambitious economic initiatives despite limited internal staffing and budgetary constraints. ACTION TIME HORIZON LEAD ENTITY Action A5.1: Formalize partnerships with regional economic development organizations and neighboring jurisdictions to share resources, coordinate efforts, and leverage specialized expertise. S Action A5.2: Explore the feasibility of implementing an Enhanced Infrastructure Financing District (EIFD) to support the funding of economic development projects. M Action A5.3. Establish an Economic Development Authority with powers to define economic districts, purchase property, enter limited partnerships, and operate select facilities/infrastructure. L

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23 PRINCIPLE B: REINVIGORATE THE BUSINESS CLIMATE These strategies focus on strengthening Palm Springs' business climate by reducing barriers to entry, expanding economic incentives, and fostering a more resilient and dynamic commercial environment that thrives year-round. By streamlining the permitting process, supporting priority industries, enhancing nighttime business opportunities, and launching targeted investment marketing efforts, these initiatives aim to attract new businesses, retain existing ones, and create a more business-friendly ecosystem. Initiative B1: Improve ongoing engagement with the business community Clear, predictable permitting processes are essential for business confidence and investment decisions. At the same time the City’s broader regulatory framework and internal processes are being streamlined, immediate improvements to the user experience can provide tangible benefits to entrepreneurs and small business owners. By creating standardized packages, establishing dedicated support services, and implementing business-driven feedback mechanisms, the City can eliminate common pain points that discourage business formation while maintaining regulatory standards that protect community interests. ACTION TIME HORIZON LEAD ENTITY Action B1.1: Launch a formal business advisory group with local entrepreneurs and small businesses to identify ongoing challenges and recommend process improvements. S Action B1.2: Deploy a customer relationship management (CRM) tool to track business inquiries and interactions, provide updates to the business community, and improve engagement. M Action B1.3: Create pre-approved permit packages for common business types (restaurants, retail, service businesses, home-based businesses) that bundle required permits and provide clear timelines and requirements. M Action B1.4: Establish a permitting concierge service (that features a combination of live and automated interfaces) to provide direct assistance to businesses navigating the permitting and licensing process. M Initiative B2: Expand incentives for businesses in priority industries Financial considerations heavily influence business location and expansion decisions, particularly for enterprises in competitive or emerging sectors. Strategic incentives and cost reduction measures can

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24 position Palm Springs as a preferred destination by improving business cash flow, reducing startup barriers, and demonstrating the city's commitment to enterprise success. By implementing targeted tax benefits, utility assistance, and specialized district designations, the City can create meaningful financial advantages that attract investment while maximizing return on public resources. ACTION TIME HORIZON LEAD ENTITY Action B2.1: Create a comprehensive guide detailing all available city and county-level business incentives including grants, tax benefits, fee waivers, and development programs. S Action B2.2: Update the hotel operations incentive program by refining classifications and structuring share agreements that align with evolving short-term rental (STR) capital market dynamics to enhance financial feasibility and industry competitiveness S Action B2.3: Implement a business tax incentive program offering reduced tax rates for new businesses in priority industries, including a first-year business tax exemption and a reduced tax rate in the second year to encourage business growth and investment. S Initiative B3: Establish designated business districts and support policies Strategic district designations create focused investment zones that strengthen commercial identity, encourage complementary business clusters, and streamline targeted support policies. By formalizing these districts, Palm Springs can concentrate resources to address unique area needs, improve visitor navigation, and create distinctive commercial environments that enhance both economic activity and community character. ACTION TIME HORIZON LEAD ENTITY Action B3.1: Conduct a citywide assessment to identify distinct business concentrations, evaluate unique characteristics and needs, and establish potential boundaries for formal district designations. S Action B3.2: Develop district-specific development guidelines tailored to each area's identity, economic role, and growth potential to ensure coordinated investment and coherent placemaking. M

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25 Action B3.3: Establish district-based business associations that facilitate collaboration among district businesses, promote capacity building, coordinate joint marketing initiatives, and serve as liaisons with the Office of Economic Development. L Initiative B4: Support and expand nighttime business opportunities The nighttime economy represents a significant untapped growth opportunity that aligns perfectly with Palm Springs' tourism strengths and extreme daytime temperatures. Extending commercial activity beyond traditional business hours creates additional revenue potential for existing businesses, generates new entrepreneurial niches, and enhances the visitor experience. Through coordinated infrastructure improvements, regulatory adjustments, and marketing initiatives, Palm Springs can transform evening hours into a distinctive economic advantage while creating vibrant, safe nighttime districts that benefit residents and visitors alike. ACTION TIME HORIZON LEAD ENTITY Action B4.1: Develop a nighttime business incentive program, offering grants or tax breaks for businesses that extend operating hours, particularly in hospitality, retail, and entertainment. S Action B4.2: Market Palm Springs during the summer months as a nighttime destination with extended hours, special events, and promotions to offset heat-related daytime business slowdowns. S Action B4.3: Improve infrastructure for nighttime commerce and community activity by enhancing pedestrian-friendly areas with increased lighting and a free nighttime shuttle service to connect key entertainment and commercial district. M Action B4.4: Designate specific nighttime business zones to streamline permitting for late-night vendors, entertainment venues, and pop-up experiences; concentrate businesses in walkable districts to facilitate foot traffic; and create vibrant late-night hubs for dining, entertainment, and retail.

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26 police presence to create visibly safer environments that encourage evening economic activity and pedestrian traffic. Initiative B5: Improve business resilience through emergency preparedness, mitigation measures, and recovery assistance Business disruptions from natural disasters, public health emergencies, or economic shocks can devastate individual enterprises and entire commercial districts. Proactive resilience planning combined with responsive recovery resources helps businesses navigate challenges that might otherwise force closures. By developing comprehensive preparedness frameworks, resource hubs, and financial assistance mechanisms, Palm Springs can strengthen its economic foundation, minimize disaster-related business losses, and demonstrate the City's commitment to supporting enterprises through unforeseen circumstances. ACTION TIME HORIZON LEAD ENTITY Action B5.1: Develop a business emergency preparedness plan that outlines protocols and resources to help businesses mitigate risks and respond effectively to economic shocks. S Action B5.2: Partner with utility companies to create a small business utility assistance program, providing grants or subsidies to offset energy, water, and operational costs during summer months. S Action B5.3: Create a dedicated resource hub offering online and in-person guidance on business continuity planning, insurance options, and financial assistance programs. S Action B5.4: Collaborate with County, State, and Federal agencies to develop infrastructure to administer business recovery and rapid response programs. M Action B5.5: Develop an integrated Emergency Management System connecting City departments, convention facilities, hotels, and commercial districts to improve coordination during emergencies, share real-time hazard information, and accelerate recovery efforts following disruptive events.

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27 PRINCIPLE C: BOLSTER CORE INDUSTRIES These strategies focus on bolstering existing industries—tourism, arts and culture, and hospitality—as key mechanisms to drive economic development in Palm Springs. By expanding visitor engagement and options for consumer spending, enhancing Palm Springs’ distinct identity as an avant-garde cutting-edge destination, and leveraging key infrastructure investments, these initiatives aim to leverage and enhance existing foundations to support long-term growth and sustainability. Initiative C1: Establish the Palm Springs Convention Center District A formalized Convention Center District creates a vibrant hub connecting hospitality, entertainment, and commercial activities around this key economic asset. By coordinating development, infrastructure improvements, and programming in this strategic area, Palm Springs can maximize visitor spending, enhance the convention experience, and create year-round economic benefits that extend throughout the city's tourism economy. ACTION TIME HORIZON LEAD ENTITY Action C1.1: Define a new downtown Convention Center District through zoning updates that establish development standards, permitted uses, and design guidelines supporting an integrated convention and hospitality ecosystem. S Action C1.2: Develop a comprehensive Convention Center District improvement plan that upgrades and positions outdoor event spaces, indoor/outdoor social areas, and local food and beverage facilities to enhance both attendee experience and revenue generation opportunities.

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Action C1.3: Implement a transportation connectivity plan that creates a seamless visitor experience between the Convention Center, downtown Palm Springs, nearby hotels, and the airport. M Action C1.4: Develop targeted business attraction strategies for food and beverage, retail, and entertainment venues within the district based on consumer preferences for goods and services within walking distance. M

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28 Initiative C2: Promote Palm Springs as a premier destination for corporate and group business tourism Business travel represents a significant, and to date underleveraged, opportunity to diversify Palm Springs' visitor economy with higher-spending, midweek, and off-season guests. Through targeted marketing, strategic partnerships with industry sectors, and infrastructure enhancements, the city can position itself as an ideal venue for conferences, corporate retreats, and incentive travel. These business visitors not only generate substantial economic impact during their stays but often return as leisure travelers, creating a sustainable pipeline of high-value tourism. ACTION TIME HORIZON LEAD ENTITY Action C2.1: Develop targeted marketing campaigns promoting Palm Springs as a business tourism destination for target industries emphasizing its unique blend of luxury, recreational, and cultural experiences. S Action C2.2: Launch partnership programs for corporate entities to host their conferences, retreats, and related events in Palm Springs. M Action C2.3: Develop strategic partnerships with business event industry organizations, travel management companies, and event planning platforms to increase Palm Springs' visibility in business travel booking channels and attract new corporate clients. M Action C2.4: Establish a dedicated business tourism support team to provide personalized concierge services for meeting planners and offering site selection assistance, vendor coordination, and specialized local knowledge to enhance the business event experience. M Initiative C3: Strengthen and activate the Palm Springs arts and culture ecosystem Palm Springs’ arts and culture ecosystem remains a cornerstone of its economic and cultural identity. To sustain growth and year-round engagement, the City will focus on programmatic development, ecosystem coordination, and creative entrepreneurship that amplify both community vitality and tourism. This initiative aims to create a unified, inclusive, and data-informed framework that supports artists, venues, and cultural organizations through coordinated programming, shared infrastructure, and expanded access to resources.

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29 ACTION TIME HORIZON LEAD ENTITY
Action C3.1: Conduct a comprehensive arts and culture ecosystem assessment to map creative assets, identify programming gaps, and inform targeted investment strategies. S Action C3.2: Establish an arts and culture program development fund to support collaborative programming, shared marketing, and cross-sector partnerships between arts, tourism, and hospitality sectors. S Action C3.3: Develop coordinated programming and venue activation initiatives that link arts organizations, hospitality partners, and cultural districts to deliver year-round events, exhibitions, and residencies. S Action C3.4: Launch an accelerator program providing business training, mentorship, marketing support, technical assistance, and financing pathways for artists, cultural producers, and creative entrepreneurs. M Action C3.5: Host an annual Palm Springs Arts & Culture Summit to convene artists, galleries, Tribal cultural leaders, LGBTQ+ arts organizations, hospitality partners, and funders to highlight Palm Springs as a premier creative destination. L Initiative C4: Leverage Palm Springs International Airport expansion Airport connectivity directly correlates with economic development potential, particularly for tourism-focused economies. The expansion of Palm Springs International Airport creates opportunities to strengthen the visitor economy through improved access, while also supporting complementary industry development. Strategic integration of local arts, targeted route development, and future-oriented planning can transform the airport from simply a transportation facility into a powerful economic development asset that showcases the city's distinctive character from the moment visitors arrive.

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30 ACTION TIME HORIZON LEAD ENTITY
Action C4.1: Partner with airlines, tourism boards, and business organizations to secure new direct flight routes from high-value domestic and international markets. M Action C4.2: Establish partnerships with local aviation schools, flight training programs, and industry leaders to create job training pathways in aviation and airport logistics. M Action C4.3. Develop the airport-adjacent Foreign Trade Zone to attract and expand logistics, manufacturing, and distribution operations for companies seeking to leverage air transportation connectivity and strengthen supply-chains. M Action C4.4. Partner with local academic institutions and regional businesses to develop training programs in aviation technology to position Palm Springs as a hub for next-generation aviation workforce development. L Initiative C5: Expand Palm Springs' roster of visitor attractions and hospitality businesses Palm Springs' tourism strength depends on continuously refreshing its appeal to emerging audience segments while honoring its iconic heritage. Transforming Palm Springs into a desert laboratory for cutting-edge creative expression creates powerful differentiation in the competitive tourism landscape. By incentivizing immersive experiences, nighttime activation, and experimental events that merge art, music, and technology, the city can cultivate a reputation as an avant-garde cultural destination. These distinctive offerings not only attract visitors seeking unique experiences but also extend the tourism season by creating compelling attractions that thrive regardless of seasonal temperatures. ACTION TIME HORIZON LEAD ENTITY Action C5.1: Create an inventory of Palm Springs’ visitor experiences, landmarks, and cultural assets to inform the marketing and promotional initiatives. S Action C5.2: Connect cultural organizations with hospitality businesses to develop joint programming, package deals, S

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31 cross-promotional opportunities, and visitor experiences that benefit both sectors. Action C5.3. Expedite permitting for festival promoters, performing artists, and nightlife curators to produce experiential arts, site-specific performances, and multi-venue immersive experiences. S Action C5.4. Develop an Entertainment Zone ordinance and management plan to activate commercial corridors and drive additional revenue for local restaurants and bars. M Action C5.5: Develop an indoor or nighttime outdoor immersive art experience and incubation space that combines digital technology, interactive installations, and local artistic influences and can be enjoyed during the summer months. M

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32 PRINCIPLE D: SEED AND NURTURE EMERGING CLUSTERS These strategies focus on diversifying Palm Springs' economy beyond its traditional strengths by cultivating vibrant, interconnected industry clusters across technology, climate innovation, health and wellness, and the creative sectors (which include industries beyond arts and culture). By leveraging Palm Springs' unique geographic advantages, quality of life, and existing talent pool, these initiatives aim to position the city as a hub for innovation that addresses desert-specific challenges while creating sustainable, year-round economic opportunities. This approach emphasizes cross-sector collaboration, practical technology adoption for local businesses, strong educational partnerships, and accessible funding mechanisms to ensure inclusive growth that complements and amplifies rather than minimizes or replaces Palm Springs' established identity. Initiative D1: Build a robust technology ecosystem in Palm Springs Palm Springs will connect and nurture its existing tech talent to promote economic diversification and boost competitiveness. By fostering collaborative networks, mapping local expertise, and creating practical adoption programs, the city will leverage technology as a multiplier for traditional industries while cultivating new entrepreneurial opportunities that create high-wage employment opportunities. ACTION TIME HORIZON LEAD ENTITY Action D1.1: Conduct a comprehensive assessment of Palm Springs' existing technology ecosystem assets, capabilities, opportunities, and gaps and develop a cluster development roadmap. S Action D1.2: Support local initiatives that connect local tech professionals, businesses, and educators through regular meetups, a digital platform, and industry events to leverage existing talent and create awareness of local tech capabilities and commercial opportunities. S Action D1.3: Develop educational programs for businesses and entrepreneurs to learn about emerging tech opportunities and how to build the necessary skills to leverage them, with a special focus on underrepresented communities. M Action D1.4: Launch a business technology adoption program offering workshops, consulting services, and resources to help local businesses effectively implement digital tools, analytics, and automation technologies in partnership with organizations like the U.S. SBA (Palm Desert) and the SBDC (Inland Empire and Orange County).

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33 Action D1.5: Establish innovation summits connecting technology companies with traditional hospitality, retail, and cultural organizations to develop new opportunities, solutions and experiences. L Initiative D2: Build equitable talent pipelines and educational pathways to support emerging industries Investing in Palm Springs' human capital forms the foundation for sustainable economic diversification. By forging partnerships between educational institutions and industry leaders, creating practical skill-building opportunities, and developing pathways that allow existing workers to enhance their capabilities, Palm Springs will cultivate a workforce ecosystem where traditional and emerging sectors mutually reinforce one another, expanding opportunities for residents at all career stages. ACTION TIME HORIZON LEAD ENTITY Action D2.1: Establish a formal a working group with representatives from College of the Desert, K-12 schools, and local tech professionals to co-develop industry-relevant courses, curricula, and training programs. S Action D2.2: Build partnerships with higher education institutions and research centers across the Inland Empire (and beyond) that have established technology and sustainability programs that align with the city’s emerging sectors. M Action D2.3: Develop a residency program placing priority industry experts in educational institutions to provide mentorship and real-world insights to students. M Action D2.4: Launch a skills integration initiative that identifies complementary capabilities between hospitality/retail sectors and emerging industries and provides targeted upskilling for small business owners and workers. L Initiative D3: Establish Palm Springs as a health and wellness technology hub Palm Springs has many unique advantages as a health and wellness: a robust hospitality industry catering to wellness-focused travelers, an established health care infrastructure, an older demographic that creates a natural test market for aging-in-place technologies, and a climate that has historically attracted those seeking health benefits from desert living. Positioning the city as a health and wellness

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34 technology hub will build on this health and wellness footprint and expand opportunities for medical advances, preventive care innovations, lifestyle enhancement solutions, and the design of digital platforms that empower individuals to manage their wellbeing. ACTION TIME HORIZON LEAD ENTITY Action D3.1: Conduct a health and wellness technology market assessment to identify specific opportunities in LGBTQ+ health services, behavioral health, medical tourism, and related disciplines. S Action D3.2: Establish a wellness innovation lab facilitating collaboration between academic institutions, health care providers, technology companies, wellness centers, and local resorts. M Action D3.3: Develop aging-focused wellness and technology initiatives that address the needs of older populations, including telehealth, mobility aids, senior housing innovations, and preventive care programs linking healthcare providers, wellness resorts, and research institutions.

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Action D3.4: Create a dedicated innovation campus with specialized facilities, clinical spaces, and R&D resources for health and wellness technology companies and hospitality-driven enterprises. L Initiative D4: Expand Palm Springs’ creative technology footprint Harnessing Palm Springs' cultural vibrancy and creative heritage can encourage the growth of thriving creative sector that feeds into the broader regional entertainment ecosystem. Mapping existing resources, showcasing talent, creating specialized support systems, and leveraging the city's ties to Hollywood and Silicon Valley will attract creative technology businesses and professionals while cultivating a more skilled local workforce. ACTION TIME HORIZON LEAD ENTITY Action D4.1: Promote the development of creative technology production infrastructure (virtual production studios, digital content creation labs, audio/podcast production facilities, and collaborative maker spaces) by converting underutilized commercial properties and M

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35 implementing streamlined permitting for creative technology businesses and location-based productions. Action D4.2: Launch a creative technology infrastructure network providing co-working space, technical resources, mentorship from industry professionals, and seed funding for startups developing gaming, XR applications, digital art platforms, and entertainment technology solutions. M Action D4.3. Establish workforce development partnerships with regional colleges to train local talent in creative technology skills including 3D modeling, game development, virtual production, and digital content creation to supply the growing creative tech sector. M Action D4.4. Host an annual creative technology exhibition showcasing cutting-edge creative technology, attracting industry professionals for business development, and positioning Palm Springs as an emerging creative tech destination for investment and talent recruitment. L Initiative D5: Promote Palm Springs as an industry leader in desert climate and energy innovation Palm Springs' desert location positions it perfectly to become a specialized technology development center for arid environment solutions with global market potential. By cultivating industry partnerships in renewable energy, water conservation, and heat mitigation technologies, the city can lead an emerging climate tech sector addressing challenges shared by desert regions worldwide, establishing Palm Springs as the premier commercialization hub for climate-adaptive technologies. ACTION TIME HORIZON LEAD ENTITY Action D5.1: Conduct a renewable energy potential assessment to identify optimal sites and technologies for clean energy development within city boundaries. S Action D5.2: Develop specialized business attraction strategy targeting companies in renewable energy, heat mitigation, water conservation, and sustainable building technologies. M Action D5.3: Create a climate innovation district and establish an annual showcase event that demonstrates innovative technologies and practices adapted to desert L

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36 environments, featuring locally developed solutions and technologies. Initiative D6: Develop innovation funds and financing mechanisms Access to capital remains the most critical barrier to technology ecosystem development, particularly in emerging markets outside major tech hubs. Palm Springs must create a comprehensive capital stack that addresses financing needs at every stage of business growth—from concept to scale-up. By developing diverse funding mechanisms that include angel networks, institutional partnerships, public-private collaborations, and specialized investment vehicles, the City can overcome the financing gaps that typically stifle innovation while ensuring capital deployment aligns with strategic economic priorities. ACTION TIME HORIZON LEAD ENTITY Action D6.1: Establish a network of angel investors and mentors interested in supporting Palm Springs-based ventures, with regular pitch events showcasing local entrepreneurs. S Action D6.2: Forge partnerships with Community Development Financial Institutions (CDFIs) and regional banks to establish a specialized financing program providing low-interest loans and flexible capital for tech startups and scale-ups. M Action D6.3: Create a public-private innovation fund with matched contributions from corporate partners, foundations, and public sources to provide matching small business grants and subsidize attendance by local tech entrepreneurs at national conferences. L

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37 PRINCIPLE E: STRENGTHEN COMMUNITY ASSETS AND INFRASTRUCTURE These strategies focus on enhancing Palm Springs' essential infrastructure and quality of life elements that support sustainable economic development. By improving transportation and mobility options, addressing extreme heat through innovative cooling solutions, expanding housing accessibility, upgrading telecommunications capabilities, bolstering energy resilience, and creating more vibrant community spaces, Palm Springs can become an even more livable and connected community that attracts and retains businesses, workers, and residents while improving overall wellbeing and economic vitality. Initiative E1: Improve multimodal transportation, circulation, and walkability to drive economic growth Palm Springs will leverage strategic improvements to its transportation network to create economic development opportunities, enhance visitor experiences, and improve quality of life for residents. By building on its existing General Plan’s Circulation Element, the City can facilitate targeted investments that connect key economic assets, strengthen regional rail connectivity to Southern California's major population centers, and develop complete streets. In short, greater accessibility will translate to more cultivate vibrant commercial districts and neighborhoods that support economic vitality during both peak and off-peak seasons. ACTION TIME HORIZON LEAD ENTITY Action E1.1: Conduct a multimodal connectivity assessment identifying high-priority economic corridors where improved transportation access would stimulate business growth, focusing on connections between downtown, the airport, convention center, and emerging commercial districts.

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Action E1.2: Implement a complete streets program in key commercial corridors that enhances both pedestrian experience and business visibility through coordinated improvements to sidewalks, street furniture, shade structures, and façade enhancement incentives. M Action E.1.3: Create a gateway enhancement program focusing on transportation improvements, signage, and landscaping at key city entry points to establish strong first impressions for visitors, reinforce city limits, and create development opportunities at these high-visibility locations.

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Action E1.4: Develop a summer mobility plan with targeted transportation improvements to support year-M

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38 round economic activity, including covered walkways, cooling stations, and evening-oriented transportation options connecting residential neighborhoods and hospitality areas to commercial districts. Action E1.5: Advocate for and partner with regional transportation authorities to maintain and enhance rail service frequency and reliability between Palm Springs and Los Angeles, Orange, and San Diego counties, supporting tourism growth, workforce mobility, and reduced car dependency.

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Initiative E2: Design, promote, and install climate-adaptive infrastructure citywide Palm Springs can retain its residential base during the summer months and position itself as a global pioneer in climate-adaptive tourism by transforming its extreme heat challenges into opportunities for innovation and market differentiation. By implementing cutting-edge cooling strategies, expanding shade coverage, and showcasing desert-appropriate climate adaptation, the city will demonstrate how high-heat destinations can extend outdoor activity seasons, enhance resident and visitor comfort, and create signature experiences that turn climate challenges into competitive advantages. ACTION TIME HORIZON LEAD ENTITY Action E2.1: Conduct a community heat resilience assessment identifying residential neighborhoods, hotel and resort districts, and commercial areas most impacted by summer temperatures. S Action E2.2: Create community heat relief infrastructure plan including expanded cooling centers, public realm misting stations and shade structures, enhanced tree canopy along pedestrian corridors, and public water features to provide residents and visitors with accessible cooling options during summer months.

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Action E2.3: Launch a clean energy initiative to streamline permitting and provide incentives for residential and commercial renewable energy installations. M Action E2.4: Develop a grant program for local businesses to implement innovative cooling technologies that reduce energy costs while creating comfortable environments for both residents and visitors during summer months. M

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39 Action E2.5: Implement a pilot microgrid project serving a key commercial district or residential neighborhood with renewable energy generation, storage, and smart distribution capabilities. L Initiative E3: Expand housing options with emphasis on workforce housing and live-work spaces Addressing Palm Springs' housing challenges will support economic development by ensuring workers can live near employment centers, entrepreneurs can access affordable spaces, and businesses can attract and retain talent. By promoting diverse housing types and mixed-use developments, Palm Springs will create more vibrant neighborhoods and strengthen connections between residential and commercial activities. ACTION TIME HORIZON LEAD ENTITY Action E3.1: Conduct a workforce housing needs assessment to quantify demand, identify gaps, and establish targets for housing production at various affordability levels relative to local wages. S Action E3.2: Ensure revised zoning regulations facilitate the development of live-work spaces, mixed-use buildings, and adaptive reuse of underutilized commercial properties for housing. S Action E3.3: Design density bonuses and streamlined permitting processes for developments that include workforce housing, live-work spaces, and housing near transit and employment centers. M Action E3.4: Develop public-private partnerships to create demonstration projects showcasing innovative housing models such as missing middle housing, workforce housing, and creative live-work communities L Initiative E4: Upgrade telecommunications infrastructure to support business and community needs Expanding and improving telecommunications capabilities will position Palm Springs as a connected desert community where businesses can operate efficiently and residents can access digital opportunities. By addressing gaps in coverage, ensuring reliability, and promoting digital inclusion, Palm Springs will strengthen its appeal for technology businesses, remote workers, and traditional industries.

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40 ACTION TIME HORIZON LEAD ENTITY
Action E4.1: Conduct a comprehensive digital infrastructure assessment identifying gaps in high-speed internet access, including fiber, 5G coverage, and public Wi-Fi, with analysis of how these gaps impact business operations and remote work capabilities. S Action E4.2: Develop a digital downtown initiative expanding free public Wi-Fi, interactive wayfinding kiosks, and digitally-enabled public spaces to enhance visitor experiences and support businesses in key commercial districts. M Action E4.3: Establish public-private partnerships to develop community digital inclusion programs and technology hubs that provide free internet access, digital literacy training, and technology resources in disadvantaged neighborhoods. M Action E4.4: Implement a comprehensive citywide data platform integrating information from city services, utilities, transportation systems, and environmental monitoring to improve operational efficiency, support data-driven business decisions, and create new entrepreneurial opportunities.

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Initiative E5: Create vibrant public spaces that support community and economic activity Thoughtfully designed public spaces can serve as economic catalysts while enhancing quality of life for residents and visitors. By developing climate-adapted gathering places, cultural venues, and flexible-use areas, Palm Springs can strengthen its sense of community while creating spaces for commerce, events, and social interaction throughout the year. ACTION TIME HORIZON LEAD ENTITY Action E5.1: Identify underutilized public spaces with potential for activation through a community-driven placemaking assessment process. S Action E5.2: Implement a placemaking pilot program creating pop-up community spaces with shade, seating, S

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41 public art, and flexible infrastructure for events and commerce. Action E5.3: Develop design guidelines and toolkits for climate-adapted public spaces that can be implemented by businesses, neighborhood groups, and developers. M Action E5.4: Create a network of connected public spaces along key corridors featuring consistent amenities, wayfinding, public art, and programming to encourage exploration and economic activity. M

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42 SUMMARY OF ACTIONS BY TIME HORIZON Principle A: Expand the City's economic development capacity Principle B: Reinvigorate the business climate Principle C: Bolster core industries Principle D: Seed and nurture emerging clusters Principle E: Strengthen community assets and infrastructure SHORT TERM (1-2 YEARS): 38 ACTIONS A1.1: Conduct a system, process, and technology audit A1.2: Implement an internal digital business licensing and permitting system A2.1: Conduct a review of existing Municipal Code A2.2: Integrate development incentives into the zoning code A2.3: Develop an "accessory commercial unit" designation A3.1: Establish an internal cross-departmental task force A4.1: Develop digital toolkits for businesses A4.2: Draft public education materials A5.1: Formalize partnerships with regional economic development organizations B1.1: Launch a formal business advisory group B2.1: Create a comprehensive guide detailing all available business incentives B2.2: Update the hotel operations incentive program B2.3: Implement a business tax incentive program B3.1: Conduct a citywide assessment to identify distinct business concentrations B4.1: Develop a nighttime business incentive program B4.2: Market Palm Springs during summer months as a nighttime destination B5.1: Develop a business emergency preparedness plan B5.2: Partner with utility companies to create a small business utility assistance program B5.3: Create a dedicated resource hub for business continuity C1.1: Define a new downtown Convention Center District through zoning updates C1.2: Develop a comprehensive Convention Center District improvement plan C2.1: Develop targeted marketing campaigns for business tourism C3.1: Conduct a comprehensive arts and culture ecosystem assessment C3.2: Develop coordinated programming and venue activation initiatives C5.1: Create an inventory of Palm Springs' visitor experiences D1.1: Conduct a comprehensive assessment of Palm Springs' existing technology ecosystem D1.2: Support local initiatives that connect local tech professionals D2.1: Establish a formal working group with College of the Desert and K-12 schools D3.1: Conduct a health and wellness technology market assessment D5.1: Conduct a renewable energy potential assessment

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43 D6.1: Establish a network of angel investors and mentors E1.1: Conduct a multimodal connectivity assessment E2.1: Conduct a community heat resilience assessment E3.1: Conduct a workforce housing needs assessment E3.2: Ensure revised zoning regulations facilitate live-work spaces E4.1: Conduct a comprehensive digital infrastructure assessment E5.1: Identify underutilized public spaces E5.2: Implement a placemaking pilot program MEDIUM TERM (3-5 YEARS): 43 ACTIONS A1.3: Consolidate requirements across departments A1.4: Accelerate approvals for businesses in priority sectors A3.2: Partner with College of the Desert for economic development fellowship program A4.3: Develop and implement a comprehensive economic development marketing strategy A4.4: Build an interactive and publicly accessible data dashboard A5.2: Explore the feasibility of implementing an Enhanced Infrastructure Financing District B1.2: Deploy a customer relationship management (CRM) tool B1.3: Create pre-approved permit packages for common business types B1.4: Establish a permitting concierge service B3.2: Develop district-specific development guidelines B4.3: Improve infrastructure for nighttime commerce B4.4: Designate specific nighttime business zones B5.4: Collaborate with County, State, and Federal agencies C1.3: Implement a transportation connectivity plan C1.4: Develop targeted business attraction strategies C2.2: Launch partnership programs for corporate entities C2.3: Develop strategic partnerships with business event industry organizations C2.4: Establish a dedicated business tourism support team C3.3: Establish an arts and culture program development fund C3.4: Launch arts and culture accelerator program C4.1: Partner with airlines to secure new direct flight routes C4.2: Establish partnerships with local aviation schools C5.2: Connect cultural organizations with hospitality businesses C5.3: Expedite permitting for festival promoters D1.3: Develop educational programs for businesses and entrepreneurs D1.4: Launch a business technology adoption program D2.2: Build partnerships with higher education institutions

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44 D2.3: Develop a residency program placing priority industry experts D3.2: Establish a wellness innovation lab D3.3: Develop aging-focused wellness and technology initiatives D4.1: Promote the development of creative technology production infrastructure D4.2: Launch a creative technology infrastructure network D5.2: Develop specialized business attraction strategy for renewable energy companies D6.2: Forge partnerships with Community Development Financial Institutions E1.2: Implement a complete streets program E1.3: Create a gateway enhancement program E1.4: Develop a summer mobility plan E2.3: Launch a clean energy initiative E2.4: Develop a grant program for local businesses to implement cooling technologies E3.3: Design density bonuses and streamlined permitting processes E4.2: Develop a digital downtown initiative E4.3: Establish public-private partnerships for digital inclusion programs E5.3: Develop design guidelines for climate-adapted public spaces LONG TERM (5-10 YEARS): 22 ACTIONS A3.3: Increase the size of the Office of Economic Development A5.3: Establish an Economic Development Authority B3.3: Establish district-based business associations B5.5: Develop an integrated Emergency Management System C3.4: Develop an accelerator program for artists and cultural organizations C3.5: Host an annual Palm Springs Arts & Culture Summit C4.3: Develop the airport-adjacent Foreign Trade Zone C4.4: Partner with local academic institutions for aviation technology training C5.4: Develop an Entertainment Zone ordinance C5.5: Develop an indoor or nighttime outdoor immersive art experience D1.5: Establish innovation summits connecting technology companies D2.4: Launch a skills integration initiative D3.3: Create a dedicated health innovation campus D4.3: Establish workforce development partnerships with regional colleges D4.4: Host an annual creative technology exhibition D5.3: Create a climate innovation district D6.3: Create a public-private innovation fund E1.5: Advocate for enhanced rail service frequency

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45 E2.5: Implement a pilot microgrid project E3.4: Develop public-private partnerships for demonstration housing projects E4.4: Implement a comprehensive citywide data platform E5.4: Create a network of connected public spaces

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Attachment B
EDSF Implementation Proposal and
Economic Development List of Fiscal
Activities

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10/22/2025 GREATER PALM SPRINGS PRIDE $ 100,000 Palm Springs Pride Event Support 7/30/2025 GREATER PALM SPRINGS PRIDE $ 109,474 Palm Springs Pride Memorial Flag Pole* 10/9/2025 GREATER PALM SPRINGS PRIDE $ 25,000 Palm Springs Pride ILGTA Block Party Summer 2026 Marilyn 100 $ 20,000 Birthday Celebration Summer 2026 PS Chamber Fiscal Sponsor $ 35,000 AI Expo Spring 2026 Sunny Dunes Street Design $ 33,286 Business Attraction Grant Spring 2026 QVC, Inc. $ 10,000 Business Attraction Grant Spring 2026 Drone manufacturer $ 10,000 Business Attraction Grant Spring 2026 Airport Welcome Center $ 10,000 Business Attraction Grant 12/18/2025 PALM SPRINGS INTERNATIONAL FILM SOCIETY $ 50,000 Business Expansion Grant 9/16/2025 PALM SPRINGS HOSPITALITY ASSOCIATION $ 20,000 Business Retention Grant 6/25/2025 Placer AI $ 24,500 Data software (Citywide) 7/12/2025 Yiftee $ 150,000 Downtown/Small Business Support PS Police $ 500 Downtown/Small Business Support Spring 2026 PS Fire Open House - Fire Station #1 $ 500 Downtown/Small Business Support Topic Aggregate Amt Alignment With EDSF Spring 2026 EDSF Implementation $ 285,750 EDSF Implementation (part of report 2/25) PSCC $ 6,691,100 Conv Center Summer 2026 Process Audit Consulting/Business District Marketing $ 200,000 EDSF Implementation (part of report 2/25) EDSF $ 610,750 Strategic Plan Summer 2026 Economic Development & Business District Marketing $ 125,000 EDSF Implementation (part of report 2/25) PS Pride 254,474$ Support Diversity 7/15/2025 BELL LOFTS, LLC DBA DESCANO RESORT $ 7,500 Facade Improvement Business Grants 133,286$ Support Local Business 7/24/2025 KELLY MEDICAL ARTS $ 7,500 Facade Improvement Downtown/Small Biz 151,000$ Support Local Business 7/28/2025 THE VELVET ROPE, PS $ 7,500 Facade Improvement Façade 68,482$ Support Local Business 10/30/2025 J. R ROBERTS LLC $ 7,500 Facade Improvement Ai/Tech 84,500$ Support Tech Sector 12/1/2025 ACKLEY SCOOPS, LLC DBA BEN AND JERRY'S PALM SPRINGS $ 7,500 Facade Improvement FTZ 20,000$ Developer fiscal toolkit 8/28/2025 Gelato-A-Go-GO 7,500$ Facade Improvement 2025 State of the City 8,000$ State of the City Production 9/8/2025 ALCAZAR PALM SPRINGS $ 6,850 Facade Improvement Total 8,021,592$ 11/4/2025 BRANDINI TOFFEE $ 5,396 Facade Improvement 10/6/2025 HOT COOKIE $ 5,217 Facade Improvement 1/7/2026 VETIVER SALON $ 3,290 Facade Improvement 11/12/2025 JODY CAP $ 1,234 Facade Improvement 7/21/2025 POSTAL PALM SPRINGS, LLC $ 1,200 Facade Improvement 10/2/2025 THE ME TRUST DBA DESERT LEGAL DOCUMENTS $ 296 Facade Improvement 1/14/2026 ITC DILIGENCE INTERNATIONAL INC. $ 10,000 Foreign Trade Zone consultancy Spring 2026 GDLSK, LLC $ 10,000 Foreign Trade Zone Legal 12/4/2025 DRAG AND FLY TOURS & Others $ 8,000 State of the City Production 10/28/2025 LMNo2 $ 1,000,000 PSCC Architecture and Engineering 11/18/2025 MULTISTUDIO INC. $ 572,250 PSCC Branding and Marketing Spring 2026 Daley Strategies $ 307,000 PSCC Community Engagement 7/2/2025 GLOBAL SPECTRUM LLC DBA OVG360 $ 3,011,000 PSCC Facility Management 7/21/2025 CONVENTIONAL WISDOM $ 150,000 PSCC Program Management Spring 2026 CONVENTIONAL WISDOM $ 150,000 PSCC Program Management 11/11/2025 HILTON PALM SPRINGS $ 850 PSCC Stakeholder Room Rental 11/18/2025 GLOBALMELK $ 1,500,000 PSCC Urban Planning 10/6/2025 PALM SPRINGS CHAMBER OF COMMERCE $ 25,000 Tech Networking Events Total - Economic Development Spend 8,021,592$
Prioritization Mapping

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*These time frames are for internal agenda management purposes only. It should not be relied on by any third party for purposes of establishing when an agenda item may actually be heard.

TENTATIVE UPCOMING MEETING SCHEDULE
Updated Wednesday, February 25, 2026

March 11 – Regular Meeting

• Leadership Coachella Valley Program Update – Presentation (10 minutes) • Update on Orchid Tree Development – Business & Legislative (45 minutes) • CDBG Annual Action Plan – Business & Legislative (15 minutes) • Funding Commitment for Wakeland Housing and Development for Affordable Housing Project, 1555 E. Alejo Road – Business & Legislative (30 minutes) • Affordable Accessory Dwelling Unit Loan Program – Business & Legislative (30 minutes) Total time: 2.25 hours

March 11 – Study Session

• Fire Stations 1, 3, and 5 Update

March 25 – Regular Meeting

• Visit Greater Palm Springs Annual Update – Presentation (10 minutes) • CDBG Annual Action Plan, Hearing #1 – Public Hearing (15 minutes) • Hotel Incentive Agreement – Public Hearing (10 minutes) • Hotel Incentive Agreement – Public Hearing (10 minutes) • Review of Prescott Preserve Fire – Business & Legislative (45 minutes)

April 8 – Regular Meeting

• Hotel Incentive Agreement – Public Hearing (10 minutes) • Discussion of City Mayoral Position – Business & Legislative (60 minutes)

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*These time frames are for internal agenda management purposes only. It should not be relied on by any third party for purposes of establishing when an agenda item may actually be heard.

TENTATIVE UPCOMING MEETING SCHEDULE
Updated Wednesday, February 25, 2026

March 11 – Study Session

• Fire Stations 1, 3, and 5 Update

March 11 – Regular Meeting

• Leadership Coachella Valley Program Update – Presentation (10 minutes) • Update on Orchid Tree Development – Business & Legislative (45 minutes) • CDBG Annual Action Plan – Business & Legislative (15 minutes) • Funding Commitment for Wakeland Housing and Development for Affordable Housing Project, 1555 E. Alejo Road – Business & Legislative (30 minutes) • Affordable Accessory Dwelling Unit Loan Program – Business & Legislative (30 minutes) Total time: 2.25 hours

March 25 – Regular Meeting

• Visit Greater Palm Springs Annual Update – Presentation (10 minutes) • Historic Designation, 1752 Ridge Road – Public Hearing (10 minutes) • Hotel Incentive Agreement, Cactia Hotel – Public Hearing (10 minutes) • Hotel Incentive Agreement, Terra Palm Springs – Public Hearing (10 minutes) • Report of Employee Vacancies (AB 2561) – Business & Legislative (10 minutes) • Review of Prescott Preserve Fire – Business & Legislative (45 minutes) Total time: 1.75 hours

April 8 – Regular Meeting

• Hotel Incentive Agreement, Alcazar Palm Springs – Public Hearing (10 minutes) • Discussion of City Mayoral Position – Business & Legislative (60 minutes)

April 22 – Regular Meeting

• CDBG Annual Action Plan, Hearing #1 – Public Hearing (15 minutes)

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