ON THE AGENDA: Twentynine Palms City Council, June 11, 2024
ON THE AGENDA: Twentynine Palms City Council, June 11, 2024
Bending the budget, Pride Month & Juneteenth, Master Fees, Project Phoenix & Sewer funds
B-b-b-budgets are the topic of discussion at this week’s upcoming City of Twentynine Palms City Council meeting. Hopefully your economics hat is as balanced as our City’s budget will be after you attend Tuesday’s 6 pm meeting at City Hall, 6136 Adobe Road. We cover City Council agenda highlights; the full agenda can be reviewed here.
AWARDS, PRESENTATIONS, APPOINTMENTS AND PROCLAMATIONS
Following an Invocation from Reverend Casey Orndorf of First Assembly of God Church, the City will hold proclamations acknowledging Juneteenth as a City Holiday and June as “LGBTQ+ Month.” A presentation to Larry Bowden thanking him for his role as Interim City Manager and a short presentation by Rediscover 29 will follow.
The Twentynine Palms Downtown Business Association, otherwise known as Rediscover 29, is a nonprofit organization composed of local business owners and community members organized to “foster a thriving downtown economy based on cooperation, between local businesses, governmental agencies, and the residential community.”1 The membership-organization is proposing a formal partnership with the City of Twentynine Palms as an opportunity to foster networking and connection among new and local businesses, opting to takeover some of the formal welcoming duties the City currently holds such as ribbon-cutting ceremonies for new businesses. A source at Rediscover 29 was able to provide The Desert Trumpet with a statement that will be presented at Tuesday’s meeting, which states in part:
In partnership with the City of Twentynine Palms, Rediscover 29 would provide resources, information, and best practices to potential new businesses. Rediscover would also hold quarterly business mixers, make ribbon cuttings for new businesses events to remember, and work with the City on community programming.
Partnership with the City of Twentynine Palms will help Rediscover 29 achieve our goals of fostering a thriving local economy where everyone grows and thrives together.
CONSENT CALENDAR
The Consent Calendar consists of routine items usually approved with a single vote. The public is given a chance to make public comment on these items prior to the Council motion. Fill out a comment form if you wish to address any of the below items from this meeting’s Consent Calendar:
Approval of last meeting’s minutes
Approval of a $1,003,599.36 Warrant Register. A warrant register is a monthly published list of the City’s outgoing money transactions. May’s warrant register consists of payments to Tourism Business Improvement District (TBID) grants recipients, including distribution of $15,000 to Lisa Rae Black and JT City Limits for their Freedom Daze 29 event, set to take place at Freedom Plaza on July 4th weekend.
Adoption of a road maintenance and rehabilitation project list to be improved with funding from California SB1.
Providing Dine 29 Food Festival with an additional $4,000 in events grant funding for a grand total of $5500.
Finally, a required legal notice informing residents of the upcoming November 5 General Election, in which City Council District 1, currently represented by Steven Bilderain, and District 2, currently represented by Joel Klink, will be up for election.
TBID grant funds such those for Freedom Daze were distributed by the City last month.
PUBLIC HEARINGS
11. Amendments to the City's Master Fee Schedule for FY 2024-25
Was your Airbnb fined by the City for a noise disturbance? Did your un-altered dog end up at the local animal shelter and did you have to pay a fee to get that dog back? Such fines and fees fall under the category of the City’s Master Fee Schedule and are reviewed annually, with the previous review having taken place at the June 27, 2023, City Council meeting.
When amending the Master Fee Schedule, the City must remain in compliance with Proposition 218, known as the Right To Vote On Taxes Act, which sets statewide provisions for tax and fee levying. According to the Staff report, these Master Fee changes must meet the following criteria to remain compliant with Prop 218:
Rates must be based upon the proportionate cost of providing the service and not exceed the cost of providing the service
Rates must be “fair and equitable”2
A rate payer cannot subsidize another rate payer3
To summarize, these fee assessments must be fairly applied, cannot result in a profit for the municipality, and the fees must be proportional and set at a “cost-of-service” basis. Unless found to be exempt, if a fee, assessment, or tax levy does not comply with the requirements of Prop 218, then those fees must be restructured or eliminated.
The fiscal year starts on July 1, 2024, and ends on June 30, 2025, which is why the City is making these revisions to the budget and their Master Fee Schedule. Initially, the ’24-’25 adopted budget was approved by City Council on May 23, 2023 as part of its two-year budget plan. Changes to the Master Fee Schedule are made in accordance with the Consumer Price Index (CPI).
Some of the proposed Master Fee changes Council will consider at Tuesday’s meeting include:
Changes to Animal Control: Addition of City-subsidized vaccine fees and license tag replacement fees funds for the Palms N Paws Animal Shelter.4
Changes to Parks & Recreation: Changing the fees of adult softball teams and adult kickball teams to now be equal at a cost of $466 per team (kickball was previously $263 per team), and removal of fee language that is no longer applicable.
Changes to the Planning Department: Removal of the Vacation Home Rental Appeal fee of $341.04, changes in costs of amending Conditional Use Permits, development impact fees based on square footage of buildings, and “incorporation of the Administrative and VHR citations into the City's fee schedule,” which, according to the staff report, will be proposed by Community Development Director Keith Gardner at a later City Council date. Currently, VHR citation fees are addressed under the City’s Development Code with VHR citation fees implemented through Code Enforcement.
Proposed changes to the City’s Master Fee schedule will now incorporate Vacation Home Rental citations. Source: City Staff Report
12. Proposed Budget Revisions for Capital Projects Funds, Special Revenue Funds and Successor Agency Fund for Fiscal Year 2024-25.
At the May 28 Council meeting, City Staff presented on the proposed General Fund budget for the ‘24-’25 fiscal year prior to Council approval. An underlying theme of that presentation was the need for the proposed budget to be malleable in the wake of ever-increasing inflation, increased costs, and subsequent cost of living adjustment increases. With that July 1 date fast approaching, the City is making some adjustments, diverting funds from the Gas Tax Fund, Measure I Fund, and the Successor Agency Fund pools to accommodate for “Admin fees” in the General Fund. These are routine budget procedures that the City conducts on an as-needed basis. Similar to Agenda Item 11, City Council approved the General Fund budget for FY 24-25 back in May 2023, but that budget is always open to revisions as projected economic outlooks for municipalities can often change.
These agenda items, if approved, fall under the category of “inter-fund transfers,” meaning the City is taking money from one fund and allocating it toward another. In this instance, the City will be diverting the following set amounts from the special fund budgets listed below and diverting them into the General Fund:
$10,000 from the Gas Tax Fund (Capital Projects Funds)
$10,000 from Measure I Fund (Special Revenue Funds)5
$25,000 from the Successor Agency Fund6
The staff report states:
“With the current inflation hitting record highs, the cost of labor, materials and services has gone up significantly; this can potentially leave various projects underfunded. Staff will request additional funding for unfunded projects as needed.”
Inter-fund transfers such as those listed above can get bureaucratically messy as each individual fund has money allocated for specific projects and specific reasons. For example, diverting road and construction funds from Measure I to cover unrelated administrative fees in the General Fund could potentially mean some street projects get delayed or have their budgets slashed. These current inter-fund transfers are being conducted so the City can maintain a balanced economic budget.
13. Proposed Budget Revisions for Project Phoenix Funds and Enterprise Fund for Fiscal Year 2024-25.
The City Finance Director will then present on budget changes to the Project Phoenix fund and the Enterprise Sewer Fund, proposing a transfer of $70,000 from the City’s General Budget to the Sewer Fund to cover operating costs.
The Project Phoenix fund currently sits at $1.08 million with the majority of that fund being comprised of bond money and must be allocated toward affordable housing. The Enterprise Sewer Fund, on the other hand, was created to provide sewer service funding for businesses along Freedom Plaza. These sewer funds are used to cover “inspections, pumping, water quality monitoring, and permitting,” per the Staff Report. Text in the Enterprise Fund says that budget shortfalls can be addressed through the General Fund. In this case, the City’s Finance department is conducting a transfer of funds to cover the City’s financial obligations for the Project Phoenix Package Treatment Plant, set to begin “this summer” according to the Staff Report, along with operating expenditures.
DISCUSSION AND POTENTIAL ACTION ITEMS
14. Solid Waste and Recycling Program Update.
As California Senate Bill 1383 continues its rollout, organic food waste, composting, and recycling remains a topic of discussion among municipalities.
FUTURE COUNCIL INITIATED ITEMS
1. Revisit funds that were allocated to the portable showers and Navigation Center.
PUBLIC COMMENTS
You have an opportunity to 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, whereas comments on non-agenda items take place near the end of the meeting. Comments are limited to three minutes. The Brown Act prevents Council from commenting on non-agenda items. To comment, pick up a green (or occasionally gold) form at the entry desk, fill it out, and hand it to the Clerk.
Note the Council has stopped reading letters from the public into the record at Council meetings. 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 and ask that your letter be made part of the public record.
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“Fair and equitable” was used in the City Staff report but the phrase “fair and equitable” does not exist anywhere within the 1996 Prop 218 legislation text.
Referring to the constitutionality of income-based fee subsidizing, “this is because local governments typically finance these lower rates by charging higher rates to other property-owners,” according to the Legislative Analyst’s Office. In order to remain Prop 218-compliant, local governments must restructure their fee schedules and possibly alter income-based fee subsidizing programs via other routes, such as diverting money from a General Fund budget instead.
The City will be subsidizing these fees significantly- in some cases at over 50% budget operating losses. For example, “Impound Vaccination Fee - Dog - The full cost to provide this service, including materials and staff time, is $12.31, however, Staff is recommending the fee to be set at $6, which is 51% lower than the full cost.”
Measure I is a county-wide half-cent sales tax approved by San Bernardino County voters in 2004 intended for road and transportation improvements through 2040.
The current City of Twentynine Palms Successor Agency Fund budget for FY24-25 is $878,000.