RECAP: Twentynine Palms City Council, February 27, 2024
Going deep into the City's finances
In this City Council meeting, City Finance Director Abigail Hernandez-Conde gave exhaustive breakdowns of the City’s revenue sources and expenses. Following the pandemic surge of growth in Transit Occupancy Tax and Sales Tax revenue, the City has seen these revenue sources become stagnant. Expenses, of course, do not diminish and some City needs go unmet. As usual we cover the highlights—refer to the agenda packet and the video for a complete record of proceedings,
AWARDS AND PRESENTATIONS
Mayor Steven Bilderain presented a check to Conni Chaffin of Feathers and Fur Wildlife Rehab to thank her for picking up trash along Twentynine Palms Highway as part of the Trash for Cash program.
Council then presented plaques to two programs, both named Reach Out, which are unaffiliated. Per their website Reach Out Morongo Basin, which is local, is “an interfaith caregiving program.” The second Reach Out organization is a county wide initiative with offices in Upland, Jurupa, and Yucca Valley.
Recreation Division Manager Kary Minatrea presented the plaque to Reach Out Morongo Basin for their services to City residents. “I've had the privilege of working closely with them and have full confidence in their capabilities,” she said. “In appreciation of their outstanding contributions, I propose presenting them with a token of gratitude."
Former Mayor Karmolette O’Gilvie, Reach Out’s Regional Program Manager for
Community Health & Policy, accepted the plaque for the county-wide organization. She highlighted Reach Out’s programs: “the organization focuses on fostering community cohesion to address pressing issues like education, economic opportunities, and healthcare…through our programs such as financial literacy courses and the Youth Leadership Academy aimed at empowering youth. We propose a Medication-Assisted Treatment (MAT) program to support those struggling with addiction, emphasizing the importance of community-wide participation in intervention and prevention efforts.”
In reporting on meetings attended, Councilmember Joel Klink put out word that Amboy Road is closed to Kelbaker Road because of safety concerns with Bridge 77—this closure affects travel to I-40. Travelers to Las Vegas are advised to detour left onto National Trails Highway at Amboy Road, loop through Ludlow, and rejoin Interstate 40 at Cal Baker Road. He reported that travelers are learning about this through social media posts, road signage, and navigation apps.
DISCUSSION AND POTENTIAL ACTION ITEMS
Agenda item #7: Single Audit Report on Federal Awards for Fiscal Year (FY) 2023-24. City Finance Director Abigail Hernandez-Conde reported that in fiscal year 2022-23, the City received $4,811,828 in federal funds. Anything over $750,000 triggers an audit.
The audit was conducted by the independent firm Rogers, Anderson, Malody and Scott, LLP, which found compliance for all major programs. However, they reported a deficiency in contractor verification—that is, establishing that contractors and their subcontractors are not suspended or debarred from participating in federal funded projects. Director Hernandez-Conde said that these searches had been conducted, but no physical paper trail had been retained. She assured the Council that printouts will be retained in the future.
8, 9, & 10. Financial Reports, Mid-year Updates, FY 2023-24
General Fund
Capital Projects Funds & Special Funds
Project Phoenix Funds & Enterprise Fund
General Fund. Finance Director Abigail Hernandez-Conde reported on the General Fund, which covers cash balances, budget summaries, year-to-date revenues, and expenditures for fiscal year 22-23, reserves for the past three fiscal years, and budget cuts for fiscal year 24-25.
As of December 31, 2023, the city held $16.4 million in cash and investments. Proposed budget modifications include revenue adjustments due to changes in vehicle license fees, sales tax, interest, and property transfer fees. Expenditure adjustments involve the fire safety plan termination (reported here), CalPERS pension contributions, park operations, and reallocation of funds due to declining gas tax revenues.
Hernandez-Conde said, “We are projecting a surplus of $5,000 and this is mainly because we are being conservative with our revenues, especially with the Transit Occupancy Tax (TOT). In past years, revenue from the tax used to be increasing significantly, but in the last two quarters of the fiscal year it hasn't really increased by much—something like 1%.”
She also projected a drop in sales tax because of costs of goods and services, for example, she said, “restaurants have higher menu prices, and with the increase of minimum wage, fast-food restaurants are passing high prices on to the consumer and now it’s cheaper to cook at home.”
She recommended that the City Council approve the proposed General Fund budget amendments, including an interfund transfer of $8,000 from the General Fund to the Traffic Safety Fund to close the fund.
Mayor Bilderain read an email from April Ramirez, who said that “in April 2019, the City was granted a $1.3 million loan for energy efficient upgrades to city-owned buildings. Which account fund did this money go to? Are any of the funds from the loans reflected in the available balance of the accounts that are up for audit and approval today?”
Hernandez-Conde replied that “the loan money went to went to the capital projects fund. The money was spent in FY 21-22….The $1.3 million is not included in the audit because it was not a federal grant.”
Capital Projects Funds & Special Funds. These are funds designated for specific projects or purposes and include the Community Development Block Grant fund, gas tax measure, and lighting and landscaping funds. Revenue sources include taxes, grants, fees, and miscellaneous revenues are allocated for projects like the bike path in development and the Split Rock Bridge.
Hernandez-Conde emphasized the need for reallocations and adjustments to meet funding shortfalls for projects like the animal control shelter and bike path. Discussions among Council members addressed concerns about project priorities, ADA compliance for City Hall entrances, and reallocation of funds for optimal use.
Councilmember Mintz proposed reallocation of funds for IT equipment for the Luckie Park pool and Luckie Park lighting; Councilmember Klink advocated for the City’s animal shelter.
Project Phoenix Funds & Enterprise Fund. Councilmember Mintz recused himself from the discussion because his wife rents a space in the Freedom Plaza area.
Hernandez-Conde spoke to efforts to reallocate EPA grants from a city-wide wastewater treatment project to a USGS study, seeking a waiver for the 20% match requirement. Another project involves a package treatment plant at Project Phoenix, needing a 20% match and contingency funds. She proposed reallocating $156,000 from a previous city wastewater project for the remaining city match and $105,000 for contingency. She recommended that the Council approve budget amendments for fiscal year 23-24 and provide direction on remaining funds for Project Phoenix and enterprise fund reserves.
Veno Nathraj asked for a status update on the Freedom Plaza sewage treatment plant—and when the hotel planned for the plaza will break ground. Acting City Manager Larry Bowden replied that the contract for the treatment plant is about to be awarded. He added that he had no information about the hotel.
#11. Community Events Grants. The ad hoc grant committee composed of Council members Mintz and Scott reviewed applications and recommended that the 29 Palms Art Gallery be awarded $10,000. They also recommended that the Sky’s the Limit Observatory receive $5,000 for its ongoing programs.
Councilmember Mintz clarified some confusion about the 29 Palms Art Gallery grant, which the agenda implied would be for a gala dinner. It is, instead, for repairs to the building. Kathy Miller spoke for the gallery: “we are holding three major art events at that facility, and they bring in a lot of people from out of the area. This time of the year we get probably 50% of our visitors are from out of the area who are staying in local hotels. So it's very important that the heating is working. The air conditioning is working.”
PUBLIC COMMENT
Local residents John Talley-Jones, Melissa Grisi, and Travis Poston offered statements in opposition to the Yonder/Ofland resort development proposed for the Indian Cove neighborhood (covered here). Grisi said, “I have significant concerns about the location, size and impact of this project. Indian Cove is a residential neighborhood. It's not zoned for hotels or commercial projects. Hotels have no place in a residential neighborhood, particularly a neighborhood that borders the National Park.”
Following public comment, the Council adjourned to a closed session.
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