ON THE AGENDA: Twentynine Palms City Council, February 24, 2026
Mid-(fiscal) year budget reviews reveal strong reserves amid rising costs
This upcoming Tuesday, February 24, 2026, the Twentynine Palms City Council will hold a regularly scheduled meeting at 6 pm. A light agenda includes three mid-year budget updates, which can often be lengthy, and an opportunity to discuss a youth tile project in Freedom Plaza funded by $40,000 in state grants and $15,000 in city funds.
The 273-page (it’s all those budget reports) agenda packet is linked HERE.
Our coverage of the February 10 City Council meeting is HERE.
PUBLIC COMMENT
You can comment on agenda items and issues important to you at every City Council meeting. Comments on agenda items take place during discussion of that item, while comments on non-agenda items take place near the end of the meeting. The Brown Act prevents Council from commenting on non-agenda items. To comment, just pick up a form at the entry desk, fill it out, and hand it to the Clerk, who usually sits just in front of the Council bench toward the right.
Here’s the list of Council email addresses to write if you can’t get to the meeting — be sure to email them prior to 2 pm on the date of the meeting so they have time to read your email prior to discussion. You can also copy the clerk at cvillescas@29palms.org and ask that your letter be made part of the public record.
CONSENT CALENDAR
The Consent Calendar consists only of the minutes for the February 10 meeting and the adoption of a resolution that changes the length of time before City records are destroyed or deleted.
PUBLIC HEARINGS: NONE
DISCUSSION AND POTENTIAL ACTION ITEMS
Agenda item 6: Financial Report - Fiscal Year 2025-26 General Fund Mid-Year Budget Update.
The City Council will receive a mid-year budget report on the General Fund and approve (or not) interfund transfers from the General Fund to the Capital Projects Fund:
$100,300 for the community survey and consulting services for the sales tax measure.
$68,000 for the unfunded portion of the Elm Property Improvements.
$10,000 for flood monitoring equipment/cameras.
$5,000 for fixtures needed for the new Animal Control truck.
The financial report shows that the City has a cash balance of $19.8 million. The Transient Occupancy Tax (TOT) grew by 7.4%, likely due to the addition of two new hotels to the community. (See our report on the January 29 Tourism Business Improvement District meeting.)
Additionally, the report notes that the City’s reserve fund is at 84% of operating costs, well above the 50-55% required by policy. Investment income also outperformed expectations by $80,000 due to favorable interest rates.
There are, however, signs of slowing growth. Property tax increases have dropped to 4.6%, a quite sharp decline from the 11-12% growth seen in previous years.1 Furthermore, sales tax revenue is stagnant, showing no expected growth. Expenses are also rising in areas the City cannot easily control, according to the Finance Office, such as a $255,000 increase for the Sheriff’s Department contract and double-digit hikes in medical insurance rates.
Anticipating the need for the 1% sales tax that the City has spent $125,000 on studying and promoting, the snapshot for next year projects a slender surplus of $269,000.
Agenda item 7: Financial Report - Fiscal Year 2025-26 Mid-Year Budget Update - Capital Projects Funds and Special Revenue Funds.
Special and Capital Project Funds are restricted accounts used for specific community improvements. The City expects $3.0 million in tax revenue from three main sources: the Gas Tax ($816,000), RMRA (Road Maintenance and Rehabilitation Account) SB1 tax ($748K,000, and Measure I ($530,000).2 These funds pay for essential services like street pavng, bridge engineering, and public landscaping.
Although the City has been awarded millions of dollars in grants, the Staff report notes that these funds operate on a reimbursement basis. This means the City must spend its own money upfront before receiving the grant cash back. Additionally, only 48% of expected tax revenue from the main special funds has been collected so far, with the rest not expected until the end of the fiscal year. Because of the federal government shutdowns, the wait time for reimbursements has doubled from three months to six months, and can exceed a year.
The City Council will be asked to approve budget amendments for the Capital Projects Fund and accept the transfer of the monies noted above.
Agenda item 8: Financial Report - Fiscal Year 2025-26 Mid-Year Budget Update - Project Phoenix Funds and Enterprise Sewer Fund.
City Finance staff are asking the Council to adopt the proposed Project Phoenix Funds and Enterprise Sewer Fund budget amendments for FY 2025-26 and approve the $80,000 transfer from the General Fund to the Sewer Fund for utility connections needed to operate the Project Phoenix Package Treatment Plant.
The Project Phoenix Housing fund has a fund balance of $1.1 million, which is comprised of $678,000 bond proceed reserves and $473,000 from the sale proceeds of the hotel property at Project Phoenix and related interest income. The hotel site was sold in January 2022 to the Greens Group, an Irvine-based hotel development and management firm.3
These funds have not been committed to a specific project; however, the funds can only be used to fund affordable housing efforts.
Agenda item 9: Youth-Drive Tile Project at Freedom Plaza
The Twentynine Palms Parks & Recreation Department is partnering with Groundworks Arts and Joshua Tree Living Arts to create a student-made tile mural for Freedom Plaza. Funding comes from a grant given by the California Arts Council, including a $18,500 grant to Parks & Recreation and $21,500 to Groundwork Arts. The Public Arts Advisory Committee awarded an additional $15,000 to the project.
The mural will feature 500 tiles designed by local K-12 students and residents for a yet-to-be-determined location at Freedom Plaza.
Together we will create a permanent ceramic mural at the city’s civic heart—shaped by community voices and built from hundreds of handmade tiles created by local youth and residents. The finished mural is not the expression of a single artist, but a unified civic artwork formed from many individual voices, guided by professional artists and woven together into a lasting reflection of place, belonging, and community pride.
The City Council will discuss the project and advise project leaders.
Public comment and the City Manager’s report will wrap up the meeting.
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This is likely a course correction from the pandemic-era rise in property values and sales in the Hi Desert. In 2025 and early 2026, home prices in Twentynine Palms leveled off or even slightly dipped (Zillow and Redfin data show median values down roughly 5–9% year-over-year).
Measure I is San Bernardino County’s half-cent sales tax dedicated to transportation improvements.
The Greens Group was originally projected to break ground in early 2023 with an aim to open by mid-to-late 2024. That clearly hasn’t happened, and no new timeline has been made public. The Greens Group also owns and operates the Fairfield Inn on Encelia.