CITY COUNCIL STAFF REPORT
DATE: April 8, 2026 CONSENT CALENDAR
SUBJECT: RESOLUTION OF INTENTION TO ESTABLISH THE PALM SPRINGS
TOURISM INFRASTRUCTURE DISTRICT
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:
Adoption of this Resolution (Attachment A) will result in a public meeting on May 12, 2026 and a public hearing on May 27, 2026, on the formation of the Palm Springs Tourism Infrastructure District and the levy of assessments on lodging businesses.
RECOMMENDATION:
1. Adopt a Resolution entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, DECLARING ITS INTENTION TO
ESTABLISH THE PALM SPRINGS TOURISM INFRASTRUCTURE DISTRICT (PSTID) AND FIXING THE TIME AND PLACE OF A PUBLIC MEETING AND A PUBLIC HEARING THEREON AND GIVING NOTICE THEREOF”.
2. Authorize the City Manager to execute all documents consistent with this Resolution.
BACKGROUND:
The Palm Springs Tourism Infrastructure District (PSTID) is a benefit assessment district proposed to create a revenue source to help fund capital improvements and debt service programs for Palm Springs lodging businesses. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed businesses. The proposed PSTID includes all lodging businesses available for public occupancy, existing and in the future, located within the boundaries of the City of Palm Springs.
Lodging business owners decided to pursue formation of the PSTID in order to create a revenue source devoted to increasing demand for overnight visitation to Palm Springs as a tourist, meeting and event destination. If established, the PSTID would generate approximately $4,100,000 on an annual basis for capital improvements and debt service
City Council Staff Report
April 8, 2026 -- Page 2
Resolution of Intention to Establish the Palm Springs Tourism Infrastructure District programs intended to increase visitation and increase the desirability of the Palm Springs Convention Center as a tourist, meeting, and event destination.
TOURISM INFRASTRUCTURE DISTRICTS
Tourism Infrastructure Districts (TIDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow assessed business owners to organize their efforts to increase tourism. Business owners within the TID fund the TID, and those funds are used to provide services that are desired by and benefit the assessed businesses within the TID.
TID benefits:
Funds cannot be diverted for other government programs. They are customized to fit the needs of each destination. They allow for a wide range of services, including destination marketing, tourism promotion, sales lead generation, and capital improvements. They are designed, created and governed by those who will pay the assessment. They provide a stable funding source for tourism promotion.
In California, TIDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between TIDs and other special benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the TID. The City Council adopted Ordinance No. 2124 (Ordinance), establishing Chapter 3.29 of the Palm Springs Municipal Code, which modifies the 1994 Law to allow the City to pledge assessment revenues to bond repayment and other obligations for a term of up to forty (40) years.
The PSTID is proposed to be established pursuant to the provisions of the 1994 Law and the Ordinance.
MANAGEMENT DISTRICT PLAN
The Management District Plan (Attachment B) includes the proposed boundary of the PSTID, a service plan and budget, and a proposed means of governance. The PSTID will include all lodging businesses available for public occupancy, existing and in the future, located within the boundaries of the City.
The annual assessment rate is one percent (1%) of gross short-term sleeping room rental revenue. Based on the benefit received, assessments will not be collected on the following: stays of more than twenty-eight (28) consecutive days; any person as to whom or any occupancy as to which it is beyond the power of the City to impose the assessment herein provided; any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty; and stays pursuant to contracts executed prior to July 1, 2026.
City Council Staff Report
April 8, 2026 -- Page 3
Resolution of Intention to Establish the Palm Springs Tourism Infrastructure District The proposed PSTID will have a term equal to the number of years necessary to pay off the bonds, which is expected to occur thirty (30) years after the effective date of the assessment, but in no event will occur beyond forty (40) years from the date of issuance of the first series of bonds, beginning July 1, 2026, or as soon as possible thereafter.
The City will be responsible for collecting the assessment on a monthly basis from each assessed business. If funds allow, any excess revenue collected in excess of what is needed to pay principal and interest on the bonds or other obligations issues or incurred shall be forwarded to PS Resorts to fund marketing and sales programs, in accordance with the Management District Plan. The City shall be paid a fee of up to three percent (3%) of the amount of assessment collected to cover its costs of collection and administration.
PSTID FORMATION PROCESS
April 8, 2026 RESOLUTION OF INTENTION HEARING
Upon the submission of a written petition signed by the business owners in the proposed PSTID who will pay more than fifty percent (50%) of the assessments proposed to be levied, the City Council (Council) may initiate proceedings to establish the PSTID by the adoption of a resolution expressing its intention to establish the PSTID.
Petition Status: Petitions in favor of PSTID formation were submitted by assessed businesses, which represent more than fifty percent (50%) of the total PSTID assessment. This majority petition allows the Council to initiate proceedings for PSTID formation at the April 8, 2026 meeting.
No later than
April 12, 2026 NOTICE
The 1994 Law requires the City to mail written notice to the owners of all businesses proposed to be assessed within the PSTID. Mailing the notice begins a mandatory forty-five (45) day period in which assessed business owners may protest PSTID formation.
May 12, 2026 PUBLIC MEETING
Allow public testimony on the formation of the PSTID and levy of assessments. No Council action required.
May 27, 2026 FINAL PUBLIC HEARING
If written protests are received from the owners of businesses in the proposed PSTID which will pay fifty percent (50%) or more of the assessments proposed to be levied, and protests are not withdrawn so as to reduce the protests to less than fifty percent (50%), no City Council Staff Report
April 8, 2026 -- Page 4
Resolution of Intention to Establish the Palm Springs Tourism Infrastructure District further proceedings to levy the proposed assessment against such businesses shall be taken for a period of one (1) year from the date of the finding of a majority protest by the Council.
If the Council, following the public hearing, decides to establish the proposed PSTID, the Council shall adopt a resolution of formation.
STAFF ANALYSIS:
The Council could choose not to adopt the Resolution of Intention. Staff do not recommend this option.
FISCAL IMPACT:
None immediately. The City will receive a fee of up to three percent (3%) of the amount collected to cover its costs of administration. Because the PSTID programs are intended to increase visitation to the City, there may be an increase in Transient Occupancy Tax and Sales Tax Collections.
REVIEWED BY:
Department Director: Kristopher J. Mooney
Economic Development Officer: Wayne Olson
City Attorney: Jeffrey S. Ballinger
City Manager: Scott Stiles
ATTACHMENTS:
A. Resolution
B. Management District Plan