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Sun08192018

Last updateWed, 27 Sep 2017 1pm

Palm Desert Mayor Sabby Jonathan recently invited the public to enjoy complimentary coffee and conversation—something he plans on doing every month.

During his January coffee meeting, at the Desert Willow Golf Resort, the new mayor (the position rotates among City Council members on a yearly basis) was battling the flu. However, Jonathan, who works as a certified public accountant, was kind enough to agree to answer questions on anything—ranging from the city budget to new hotels to past city-employee wrongdoing—via email.

Regarding your quest for transparency—why the coffee chats?

Coffee chats are a great way for the community to engage with its elected officials. They provide an informal forum where concerns of residents can be heard and questions can be answered. The chats take place monthly, throughout the year, with the exception of July and August.

Is Measure T—an increase of the city’s hotel tax from 9 to 11 percent, passed by voters in 2016—working? How much money is it bringing in yearly, and is the city safer now because of it?

The change generates approximately $2 million in additional general-fund revenue a year, supporting police and fire services as well as other municipal programs and services that help keep Palm Desert safe and ensure a high quality of life that is enjoyed by our residents and visitors.

What is the city’s budget structure? How many special funds are there, and what are total revenues and expenditures?

The city financial records have many “governmental funds,” including the above noted general fund. The city has over 50 special revenue, capital, enterprise, special assessments and internal service funds. Most other funds are restricted or assigned for specific purposes and include traffic safety, transportation improvements, fire facilities, housing, development impact fees, recycling, public art, recreational facilities, capital improvement projects, landscape and lighting districts, etc.

For the fiscal year 2017-18, the overall expenditures anticipated for all funds are $118,624,985. Revenues are same as expenditures! Our complete budget is available online.

As a CPA, would you recommend changing anything in the current structure of the city budget?

Overall, our current budget process works very well. It is based on the city’s goals for the upcoming year, and it is “bottoms up,” meaning the process starts with the individual departments, which then take ownership of their respective budgets. We are looking at adding a five-year forecast to the budget process. … It would enable us to look ahead for the next five years, ensure there are no surprises, and give us an opportunity to take action if needed.

The city previously froze some motorcycle-cop positions. Do you plan to put them back on the streets soon?

We continue to work closely with our public-safety professionals to measure whether there have been any impacts from the frozen positions. To date, we have not seen any diminishment in the city’s ability to provide exceptional public-safety services. If this changes, we will act quickly.

The city of Palm Desert does not have its own independent police force, but instead contracts with the Riverside County Sheriff’s Department. What is the total annual dollar amount for the sheriff’s contract, and what is the current crime rate?

For fiscal year 2017-18, the city budgeted approximately $21.9 million for police services. The FBI Uniform Crime Reporting Program data for 2016 illustrates the city has a higher incidence of property crime than violent crime. This fact is likely attributable to the higher concentration of retail establishments within the city, as larceny-theft constitutes the highest number of property crimes. Examples of larceny-theft include shoplifting, bicycle thefts and pocket-picking.

Comparing the UCR data with the past crime rate reports, was there an increase in violent crimes and property crimes?

(There were) … significant decreases in every crime category, with the exception of motor vehicle theft. Overall, violent crimes were down from 117 in 2015 to 77 in 2016, and property crimes were down from 2,302 in 2015 to 2,146 in 2016.

Is the city improving, considering the new (hotel tax) income? Are the anticipated new hotels being finished on time?

Our transient occupancy tax revenue is supporting public safety and other municipal services and programs that enhance Palm Desert’s wonderful quality of life. The city is working closely with the developers of Hotel Paseo to facilitate its opening as soon as possible. … The Fairfield Inn on Cook Street finished on time and opened last summer. The SpringHill Suites (formerly the Fairfield Inn on Highway 111, which was destroyed by fire several years ago) is being reconstructed and should open later this year.

What is the city manager’s salary and benefits? The previous one (John Wohlmuth) got $300,000 (in severance and accrued vacation/sick pay) to leave amid a scandal involving nude pics.

The current city manager is paid $220,000 with a three-month severance package, but without health care or a car allowance, and with a maximum accrual of 320 hours combined sick leave and vacation. For comparison sake, the previous city manager’s salary was $248,911 annually (when he left), with six months’ severance, plus $500 per month for an automobile allowance, and the same health care and leave benefits as other executive employees (which excludes the 320 hour cap that the current city manager has). He had a combined total of 1,028 hours of sick leave and vacation time at his departure.

How do you keep the city fiscally sound? How is the city handling salaries and pensions?

The city of Palm Desert, throughout its history, has been a prudent steward of the public’s money. This is reflected in the fact that for decades, Palm Desert has adopted a balanced budget in each year, and maintains a healthy reserve balance. Looking back, we have been forward-thinking in addressing challenges related to staffing, whether it be during a development boom or a recession. During the recession, Palm Desert reduced its staff by over 30 percent, and we were proactive in making changes to pension and other benefits for new employees well before the statewide efforts to enact pension reform. … We continue to evaluate the labor market and look for the most effective ways to ensure that we have the best employees available to provide services to our residents.

Do you support the city’s system to rotate mayoral positions annually?

I am a strong proponent of rotating the mayor’s position, especially in small cities like ours. It avoids a lot of the “drama” that we see in cities with elected mayors, and it gives each councilmember an opportunity to engage at a deeper level, which I believe makes for more knowledgeable councilmembers, and a more effective council.

For information on upcoming coffee conversations, call 760-346-0611, or visit www.cityofpalmdesert.org.

Published in Local Issues

The city of Palm Desert is rising up against the state’s tax takeaways by asking its residents to raise a fee on visitors—and this is all unfolding in the shadow of a well-publicized scandal involving the former city manager.

According to city officials, the state of California has taken about $40 million away from the state every year in redevelopment funds. So on July 28, City Council members unanimously voted to place a measure on the November ballot that would increase the local transient occupancy tax (in other words, the hotel tax) from 9 percent to 11 percent, to replace a small fraction of the $40 million the state takes every year. That 11 percent would be on par with what other valley cities charge.

They nicknamed it Measure T. That may sound somewhat familiar to Palm Springs residents, who in 2011 passed something called Measure J. However, the similarities in the ballot initiatives end there: Palm Springs’ Measure J increased the sales tax by 1 percent, while Measure T will affect only people staying at the city’s hotels and motels.

Some of that Measure J money was used for downtown redevelopment in Palm Springs, and was at the center of the high-profile FBI raid at the City Hall which also apparently targeted then-Mayor Steve Pougnet.

Palm Desert Mayor Bob Spiegel was adamant that his city would not end up having any such problems if residents pass Measure T.

“I don’t think it is appropriate or relevant to talk about challenges facing other cities,” Spiegel said. “Palm Desert has earned a well-established reputation for fiscal responsibility and good stewardship of public resources.”

Spiegel said certain steps would be taken by the city to prevent any possible misuse of the funds generated by the proposed Measure T.

“Measure T is subject to strong accountability provisions, including independent audits, public oversight and local control of funds that cannot be taken by state,” Spiegel said.

While Spiegel claimed Palm Desert has a “well-established reputation for fiscal responsibility and good stewardship of public resources,” it is worth noting that the Palm Desert City Council earlier this year gave former City Manager John Wohlmuth a severance package valued at nearly $300,000 after he allegedly showed a nude photo of a co-worker to his colleagues at City Hall.

City officials claimed they approved the severance package to avoid being sued by Wohlmuth.

Anyway, back to Measure T: Spiegel said the Measure T funds would help the city deal with rising public-safety costs.

“For the first time in Palm Desert’s history, public-safety costs have exceeded 50 percent of our annual budget,” he said. “Measure T will provide a dedicated local source of funding.”

Palm Desert contracts with the Riverside County Sheriff’s Department for law-enforcement services.

“We work closely with the (sheriff’s department) to address the community’s needs,” said Justin McCarthy, Palm Desert’s interim city manager. “If, in consultation with them, additional deputies are required, we would recommend adding them.”

McCarthy, who is being paid $119 per hour as the interim city manager, said Measure T would generate approximately $2.2 million annually.

Palm Desert is home to 12 hotels with 2,171 rooms. There are also numerous timeshare properties that will be affected by Measure T, depending on their vacancy.

“The city has three vacation ownership (timeshare) properties that function like hotels: Marriott Shadow Ridge (1,093 rooms), Westin Desert Willow Villas (268 rooms) and Embarc Palm Desert—Intrawest Resort (88 rooms),” said Palm Desert spokesman David Hermann.

According to Hermann, the three timeshare properties function as hotels when the units are not booked by owners.

“The resorts advertise the rooms on online travel sites, etc.,” he said. “And when guests pay their bill, the resort collects the transient occupancy tax along with the charge for their lodging.”

Measure T would obviously bring in even more revenue with additional hotel development—and city officials say two new hotels are under construction.

“Hotel Paseo is a boutique hotel being built next to The Gardens on El Paseo,” Hermann said. “It will have 150 rooms. The brand is the Marriott Autograph Collection, and the hotel is expected to open in September of 2017.”

A Fairfield Inn, near Interstate 10 and Cook Street, has a projected October 2017 opening date.

Published in Local Issues