City Council - Regular Meeting

Gerald. All right. We'll call the meeting to order. This is the regular meeting of the city council and the city council serving as a successor agency to the former redevelopment agency board for Tuesday, June 2nd, 2026. This is our 4.30 p.m. closed session. Roll call, please. Council Member Gardner.

Present. Council Member Pitts. Present. Council Member Pai. Present. Mayor Potemko. Present. And Mayor Mattis. Present. Too many public comments?

No, we do not. I'll see any in the audience. All right. Madam City Attorney, would you announce a closed session?

Thank you, Mr. Mayor, members of council. We do have two items on, but it's only under one item. Conference with legal counsel anticipate a litigation, initiation of litigation pursuant to paragraph four, subdivision D of section 54956.9. There are two potential cases.

And we'll recess to close session. I'm going to evoke my powers as the mayor of the city of Hodge Springs, and I'm going to start the meeting one minute early. All right. So I appreciate everybody coming out, and thank you. Our regular council meetings are very boring, and no one ever comes out, so we love to have events like this where we fill the audience with people of our community. But Jan brought to my attention, Council Member Pai. that we had a little program here in our community that honored some of our students throughout our community. And our relationship as a city council with our partners for Palm Springs Unified School District, most of our principals, if not all of them, are here today. Wave, all the principals. Thank you for your partnership to the city of Desert Hot Springs, and thank you for always keeping us in the loop on everything you do for our community. So the Palm Springs Unified School District, in partnership with the Palm Springs Leadership Association, also known as PSLA, and the Association of California Schools Administrators, ACSA, annually honor students who have overcome significant challenges, such as health, personal, and academic obstacles. to succeed. Several Desert Hot Springs students were honored at a ceremony on January 20th, 2026, so not too long ago. But these students came from our elementary schools, our middle schools, and our high schools here in Desert Hot Springs. So we wanna honor you if you're here today. I'm gonna try to say your name without messing it up too much. And if you can, I'd love you to come stand up here with us so I can talk about this a little bit and give you a little certificate for our appreciation here in Desert Haunt Springs. So we're going to start with Bella Vista. Gail Lopez, did I say that right? Gail Lopez.

Gail Lopez? No?

Not here? Okay. Zion Montajo? Was it close?

I'll get it right again.

It's always hard to be the first one.

Christopher Ruiz. Christopher Ruiz. Carlos Gonzalez. Sophia Martinez. Now I'm probably gonna mess this up. Is it Tama? Palomino? No? Okay. It's okay if I messed it up, he wasn't here. Don't tell him, please. And Farrah Parker was here, but she had to leave early, so we were able to take some pictures and give her her certificates, so that was pretty awesome. From Desert Hot Springs High School, Chase Lyons. And from Mount San Jacinto, I'm gonna mess this up too, is it Asad? Doran? Asad? So on behalf of the City Council, we wanted to say thank you and for doing what you did to get this award and honor you. The Mayor and the City Council of the City of Desert Hot Springs hereby honors you, and we have your name and your school, for being the 2026 nominee, Every Student Succeeding Awards, Palm Springs Unified School District. And I'm gonna hand these out in a minute. But this was just a nomination, and then there was an actual awardee, correct? For our district. And we have that awardee with us today, Chase, actually with the awardee. Now Chase won the Palm Springs Leadership Association District Every Student Succeeding Award and went on to represent us at Region 19, which has already taken place. But congratulations and thank you for representing the city. Now he has about a three hour speech. Three minutes? Five minutes? Do your thing.

Good evening. I would like to thank the city council for recognizing all of us receiving this honor tonight. I grew up here in Desert Hot Springs. My family moved here when I was one and a half years old. And I have attended Desert Hot Springs school my entire life. When I started at Bubbling Wells, I was nonverbal and faced many behavioral challenges. There was times when school was difficult but I had teachers, aides, principals, school staff, and family members who believed in me and helped me overcome the obstacles that stood in my way. Especially I want to thank Mr. Tinoco, Ms. Johnson, and for going above and beyond. Ms. LaFour and Ms. Coley for never giving up on me. And Reggie for always taking the time to talk with me and helped me through difficult moments. I also want to thank every staff member who played an important part in helping me become who I am today. There are too many to name, but I am grateful for all of them. I worked hard to be where I am, but I know I did not do it alone. Their encouragement, patience, and belief in me helped me become the person I am today. I am proud to have grown up in Desert Hot Springs, to have graduated from Desert Hot Springs High School with my high school diploma, and to be attending College of the Desert this fall. To the other students receiving this recognition tonight, keep working hard and never give up on yourself. Thank you.

All right, stay up here. The best part is we get to take pictures.

That's the fun part for me.

All right, who's Zion? All right, you're going to hold this just like that. And Christopher, is that you? I can't remember my own kids' names half the time. Carlos? you stand back here cuz you're tall congratulations everybody thank you the principals for everything you do for our school a couple more days you get that summer break yay thanks again so we're gonna take a few pictures real quick and then don't anybody leave yet we've got a video to show of another program here in the community I'd like you to watch it's only a few minutes okay so I'm gonna get the city I'm gonna have you guys back up a little bit towards the podium Mind you. Are we good?

Yes.

If you want to stand up and take pictures, you're more than welcome.

One, two, oh, look over here.

I know the police chief's scary, but he'll be okay.

One, two, three.

also so that you know you can watch this on YouTube

So next we have a short video of our junior ROTC program from Desert Hot Springs High School and their annual ceremony. We're going to show that right now.

The mission and goal of the ROTC program is to foster a leadership and education course that is designed to challenge students to be the best version of themselves. That's through classroom instruction, physical activity, conducting drill. kind of inserting some things into the curriculum that makes students uncomfortable that will challenge them to become the better version of themselves.

I'm a marine instructor. I assist the senior marine instructor, Master Sergeant Simmons, in training, coaching, mentoring about 105 cadets.

We want to train people to be the future supervisors and the managers of different organizations through the strong leadership skills that they have gained while with us in the ROTC program.

When we decided to join this program, it started with my brother. He went to the Marine Corps and I saw the instructor come in, I saw their uniforms, I saw their cadets. I saw them do a challenge for push-ups and I ended up signing to go into MCJROTC because I just want to challenge myself more.

ROTC has an event where they go to the middle school and they speak to the eighth graders. I happened to be there and I spoke to some of the cadets that were there. I saw their uniforms. I just saw how put together they were and it just motivated me to want to join.

What made me join the program was my brother because he was in this program a few years back and I saw how confident and outgoing he was. I thought that I could be more confident.

Students come in in their ninth grade freshman year, they're very shy, they're timid, they kind of don't want to be here because they're afraid or for whatever reason. But after a little bit of time, maybe one to two years, they start to come out of their comfort zone. They start to develop that leadership. They develop confidence that we're really looking for in our students.

I feel like it's changed me for the better. I was once an introverted child. I have come so far. I've gone out of my shell. I found a new purpose in life and I've created more friends and more opportunities for myself for my future.

When I first learned about the program, what stood out was I guess the intensity, but also sometimes the lack of intensity and the way that it's still challenging what needs to be, but it gives you a good guide to life. It shows you the obstacles you're going to face in the real world while not breaking you completely.

My freshman year, I was not exactly what you would say disciplined. I was kind of all over the place. I didn't really care much about my grades. I didn't really put much effort in, but I joined this program pretty much immediately. And it, just the way my leadership was, the way that they guided me, made sure I got good grades. And it just, it changed the way that I look at everything, including school.

Discipline is the hallmark. Without discipline, you won't start and you won't finish it, so a little bit of discipline goes a long way.

This program changed me because of the discipline building. I was way less disciplined. Before, like in middle school, I really didn't care about my grades and I used to get into trouble, but now I'm more disciplined than I was before and it definitely helps me in my regular life.

The future that I want for myself and that I see myself in is being in the Marine Corps. I have never thought of it as an option until I've joined the program and I fell in love with it and I just see myself as a Marine.

Cadets are learning leadership skills. They're learning communication, time management, and things of that nature. It's forcing them to lead and to step up to the challenges that we place upon them so that they can develop their leadership styles.

Since I joined the program, I mainly already wanted to be a Marine when I joined. So it just gave me more options of what I can be as a Marine, what I can do in my career, going officer route, going war officer route, doing different things as a job. So it's just giving me more paths towards what I could do.

You can grow for leadership. You can grow to do anything that you put your heart to and your mind to. In this program, it helps you open up to be someone you didn't think you could be.

If you're thinking about joining this program, in my personal opinion, you should because after high school, some people really don't know what they're going to do, what your career option is.

It'll absolutely change you. It'll absolutely change the way you think. You will have a plan. We will make sure you know what you're doing after high school. We will make sure you graduate and just get things done. It's going to motivate you.

Even though it is tied and connected to the Marine Corps, any student that has interest in Air Force, Army, any type of military branch, we have the staff here to support them to really explore that opportunity. We know that not all students are going to go straight into college and some may want to explore this option and we are here to help you with that process.

sign and you're like,

All right. Good evening, everyone. We're going to get started. This is the regular meeting of the City Council. The City Council is serving as a successor agency to the former Redevelopment Agency Board for Tuesday, June 2nd, 2026. This is our 6 p.m. regular session. Roll call, please.

Council Member Gardner. Present. Council Member Pitts. Present. Council Member Pai. Present. Mayor Pro Tem Vos. Present. And Mayor Meadows. Present.

Our invocation tonight is going to be given by Cheryl Bailey of the Spring Church here in Desert Hot Springs. Welcome.

Good evening. You can bow your heads, please. Thank you, Father, for this group of people here that are serving for our community, Father. I pray peace upon this meeting and peace upon this room, Father, as we gather here together, as they compile together, Father, to do well and do good for our community, Father. I pray that they're in agreement and unity in all that they do and the good things they do for the city, Father, that their mind is set upon you and how things should be done well and good and for your purpose for this city of Desert Hot Springs, Father. So I leave it in your hands in this place, and we just give it to you in Jesus' mighty name. Amen.

Amen. Thank you so much for being here tonight. Please rise. Ms. Pye, would you lead us in the pledge?

With enthusiasm, I pledge allegiance.

All right. Madam City Attorney, any report on closed session?

Thank you, Mr. Mayor. We have no reportable action.

Thank you. At this time, we're going to ask for the approval of the agenda and the consent calendar. Is there any items in the consent calendar that anyone would like to pull?

I would like to pull from the consent. Now I've got to find it. Regarding SAG.

Swag number nine? Yes. You just have a question you want answered or is it the item that you want pulled and discussed? I want it pulled. Thank you. All right. Pulling item nine. Any other items?

I move that we adopt the consent calendar with the exception of item number nine.

Is there a second? Is there any public comments on the consent calendar besides item nine? See nobody coming forth, please vote.

Motion passes unanimously.

All right, this time we're going to take public comments pursuant to the Brown Act. Any person who may comment on matters of general interest within the subject matter jurisdiction of the City Council not listed on the agenda under the Brown Act, the City Council shall not take action on or discuss matters raised during the public portion of the comments. all comments are redirected to the city council should be devoid of any personal attacks members of the public are expected to maintain a professional courteous decorum during the public comments i only have one comment card today if you wanted to speak in front of the city council just see our city clerk maddie bow

Am I on? Perfect. Thank you very much. Good evening, mayor, city council, and city staff. My name's Maddie Bogue. I'm here tonight with Southern California Edison to formally introduce myself in this new role. While I'm new to this role, I'm definitely not new to Riverside County. I'm born and raised in the city of Beaumont and spent the past five years as the director of public affairs working with the city of Desert Hot Springs and the Coachella Valley on many different development projects. In my role with Southern California Edison, I plan to prioritize being a strong and active community partner with you And I have left my cards tonight with the city clerk Please feel free to reach out to me with any questions and thank you for your time Awesome, thank you for being here tonight any other public comments before we close See nobody coming forth when closed public comments and with the city managers report. I

Thank you. Good evening, Mayor, City Council. Tonight we have one update from our Deputy City Manager, Christina Newsome.

Good evening, Mayor and City Council. In the month of May, Animal Care and Control continued its commitment to positive outcomes for animals in our community. We had three adoptions, six rescues, and 20 animals returned to their owners. Tonight, our special guest is Derek, a two-year-old male pit bull. He has a quirky, fun-loving personality, and he is our shelter favorite. Derek is full of character, loves attention, and is always ready to bring a smile to those around him. He's looking for a family to call his own and would make a wonderful companion for the right home. If you're interested in adopting Derek, contact Animal Care and Control today to schedule a meet and greet. Thank you.

All the consultants that are here today, if you wanted your contracts renewed. No, I'm just joking.

Thank you, Christina. That concludes our updates.

Awesome. And with the mayor and council member reports, Mr. Pitts, we'll start with you.

okay good evening mr mayor and city council members this is my city council update for june 2nd 2026. on may 11 2026 we had a truly productive public safety commission meeting as some may know i serve on the cachella valley association of governor cvag public safety commission alongside other fellow elected officials and our law enforcement partners throughout the region The meeting began with a presentation from Ryan Sherman of the California Narcotics Association, who discussed the dangers of 7-OH, a synthetic Kratom product, and the growing concern surrounding children being able to purchase these products from local liquor stores and smoke shops. And so one product currently receiving significant attention is called Cray Cray gummies, which are packaged to resemble common snacks and everyday energy products. Mr. Sherman also emphasized the need for local cities to strengthen their Kratom policies and reference actions already taken by Riverside County and several neighboring cities to make this more difficult for minors to access these products. The issue was presented as an emerging public safety concern requiring immediate attention. Following the presentations, members of the Public Safety Commission were honored to tour the Palm Springs Police Department's Coachella Valley Real-Time Intelligence and Crime Center. We were given an inside look at the incredible public safety resource, including live drone deployments, including real 911 calls that were coming in as we're watching this. The coordination efforts used by law enforcement to rapidly provide assistance and deploy resources to communities across the valley. I was truly impressed by both the capabilities of this intelligence and crime center, and for the dedication of our law enforcement professionals who work diligently every day to keep our community safe. With that, I yield back. Thank you, Mr. Mayor.

Thank you, Mr. Mayor. Going way back since we did not do council updates at the last meeting, attended the Marine Corps Junior ROTC promotion and graduation ceremony with Ms. Pai of the high school. These kids are really impressive. Any of you that were here during presentation saw the video of that Junior ROTC program and they just They really make us proud. They're good kids. We attended the celebration of life for former Public Safety Commissioner Lee Eastman who passed away earlier this year. Lee and his wife Barbara Moved to DHS in 2007 and served on the Public Safety Commission for many years. He was also instrumental in founding our Citizens on Patrol, and he will be missed. We had a Coachella Valley Mountains Conservancy Board meeting and a Coachella Valley Conservation Commission meeting. Both CVMC gave a planning grant to Mojave Desert Land Trust to work on a wildlife crossing bridge over Highway 62 in the canyon going up to Yucca Valley. And we'll be getting a presentation and a video on that at our next council meeting. And CVCC purchased additional land in the Willow Hole Conservation Area just east of DHS and renewed the Memorandum of Understanding with our DHS police who patrol CVCC lands in the city. We had the Memorial Day event, one of the best ones we've had, and I was glad and let Fred Bell know that this year the flyover was right on time, and it worked out beautifully. I was asked to speak at the Ride of Silence in Palm Springs, which honors the people who have been killed by cars while riding bicycles. And I stress the need in my remarks for both more education and enforcement regarding bicycle safety for both riders and drivers, as well as the need for more car-free cycling infrastructure like CVLink. And if you've noticed, we've put brand new bike lanes and green bike boxes all up and down CVLink So please, please pay attention to that and watch out for those cyclists. The SCAG, Southern California Association of Governments Legislative Committee meeting, was recently appointed to that by the SCAG leadership. We discussed the importance of removing restrictions on homeless grants so that cities who do not use the Housing First model, like Desert Hot Springs doesn't, can still access those state grants for homeless services. And you can pull up those pictures, Gerald. With the mayor, he and I attended the street renaming ceremony for our two high school valedictorians. So congratulations to Joel Ernesto Ruiz from Desert Hot Springs High School and Katia Martinez from Mount San Jacinto High School at Wenslaff Center. They'll have their names up there on those street signs for the next year, and they're our valedictorians for the year. And finally, you may have noticed, particularly if you are up in the area along Mission Lakes and on the north end of the city, the Coachella Valley Mosquito Vector Control District will be making several passes through DHS north of Pearson Boulevard between West and Palm to spray for mosquito larvae. this year. It's the first time we've had that kind of aerial spraying in a while. Some of it will be truck mounted spraying. It'll be starting overnight on Saturdays in June and they'll be spraying using trucks as well as drones and it's a low volume insecticide that will target mosquito larvae in standing water and it is safe for people and pets, wildlife and other insects. We'll be putting some info out on our social media as well regarding those schedules and in the affected areas you will have been mailed a postcard with the dates that your area will be sprayed and as well as additional information. That's all I've got.

Yes, sir. All right. Last month, we had our first Streets and Roads Committee with staff and Council Member Pitts, and we've come up with a draft resolution that we'll bring back to the rest of the council for consideration for adoption. We think it'll be very helpful for us. attended the DBBA luncheon where the city manager of Palm Springs spoke gave some insight just on things going on in Palm Springs and in the Western Valley region that's there and kind of some of their collaborative efforts they're involved in also participated with the desert hot springs women's club where we issued the scholarship where they issued scholarships and I was able to hand out certificates of recognition on behalf of our city there so that was nice And while you were at the, some of you were at the street sign thing that you did with the high school that day, I was at the fine food now where Amazon donated $80,000 to them. And they had asked for a desert hot Springs representative to be there. So you guys did one thing. I hopped down the down Valley to do another, and they were really happy. It was us looking to Indio. think we were in the county so we were all representative nicely so that was nice they wrote a nice letter or nice email to me and then uh last week i attended the dvba and the imperial valley economic development corp joint dinner meeting that they had and it was really interesting because um even though we're two separate counties, a lot of the things going on in Imperial Valley area impact us. And a lot of the conversation was how these will impact Coachella Valley and vice versa. And so I think there's some room in the world of economic development and projects that we're working on to consider some of that. I'm going to wrap my fingers around that a little bit more. But I was very intrigued with some of the projects that they have going on down there. But a lot of their worker base comes up from our area as well and with that. and the variety of tax credit opportunity zones and things that they've got because they're so close to, well, they're right there at the Mexico border, that it's beneficial that it kind of makes you wonder, is there a way that we can benefit from that as well? And I think there is. And so I'll bring that up in my meeting with our Madam City Manager. And that's it.

Mr. Spock?

My public comments were done during the 5.30 presentation today, and that is it.

And if you weren't with us during that, we recognize some students in our community, and the presentation that Ms. Pye was alluding to was our ROTC program. As Mr. Gardner alluded to, they went to the ceremonies here recently, and there was a video that came along with it, so it was very cool. You can go back and watch that if you didn't get to tune in during that time. My activities over the last few weeks, obviously the Memorial Day event, wanted to thank all our staff again for coming out. A lot of you come out when you don't need to on a holiday and some of you are forced to in public works to come out because it's a holiday and Roberta's forced to be out there. But thank you to everybody that participates from our city and thank you to the community for continuing to support our Memorial Day event. As talked about by Mr. Gardner, we attended the street naming, which is something that I make sure I do attend each and every year. I think it's so important for our valedictorians to be recognized in our community from our two different high schools. It's a... it's tough to be the number one student in your class. And so to give a little bit back to them by naming a street after them and for the next 365 days, it's, it's pretty awesome. So that was, it was a fun ceremony. I did attend transportation and the CVAC executive committee yesterday for the city of desert hot Springs. Um, because of the annual meeting, they put those two meetings on the same day, uh, once a year. And so it's a lot, but, uh, I did have a few things that I thought was interesting that Desert Hot Springs might be interested in. There was an appeal to the TUMF calculations, which is the transportation that each developer pays to the Coachella Valley for projects. And the reason I bring this forth is because a lot of people do travel to Indio. And in Indio, the old fashioned mall is being redeveloped. And the appeal was actually because they're actually decreasing the size of that facility. And so once phase three is built, they've worked a deal that we agreed to that they would not have to pay as much or even get a reimbursement for their time. But with that said, it's one of those icon buildings in the Coachella Valley that you've seen if you grew up here or live in the East Valley for so long. And it'll be redeveloped. So they already have quite a few tenants. And they're going to tear down the middle of the mall. It'll be gone. So pretty cool. Vehicle miles traveled, it's something that's been talked about a lot. What is the state going to do to fund transportation in the future because all of us go to the gas pump and put our gas in and we pay taxes? Well, that's being diminished because of electric vehicles. So a lot of the calculations that are being done in the future will come on vehicles miles traveled. And they're going to do that because they're going to read your cell phone. They're going to read your iPads. They're going to read your car data. And that's all being, you're given permission whenever you jump on your phone for the most part. So with that said, there's a model that each of the COGs are doing throughout Western California. WRCOG, what does that stand for? Western Riverside. Thank you. They are taking the lead, and CVAC has their own model that they're presenting. They presented the model yesterday on what that will look like, and a lot of good data in there. And so we approved that to move forward to WRCOG. Also, the CVAG is moving forward with a multi-modal corridor plan. This is basically for bike riders, pedestrians, transit, EV, travelers, and what that's gonna look like. So the corridors are Highway 62, I-10, Highway 86, and everything in between. So they developed a plan and they awarded that to an engineering firm to start the studying on that. So we'll see that in a couple years, probably finalized, and what that'll look like for the future of the Coachella Valley. The big project, number one project in the Coachella Valley for Coachella Valley Association of Governments for transportation is the Monroe Over Interchange in Indio. It's been talked about for many, many years. And a lot of you will know if you've taken the journey from as long as I've been on the city council, we were able to approve three interchanges to be built when I first started in 2007, 8, 9, somewhere in there. And we were able to fund those projects with some federal funding, and it was around, I want to say, $30, $40, $50 million. I'm probably off a little bit on a few million. But that was three interchanges. That was Indian Canyon, Palm Drive, Gene Autry, and Day Palm. So three interchanges there. The Monroe interchange, over time, has grown financially almost unsustainable. It's grown so much on the cost. And at one point, it was around $85 million, and now it's grown to $127 million. But over time, they've found a lot of funding. I think there's 12 different funding mechanisms going into this interchange. And it basically comes down to the engineering, which is starting. The construction will start. And I believe the finish date is 2029. The reason I bring it up is because it does pertain to desert hot springs to a very small fraction of it is that all the cities share and a cost mechanism that They read your phones and find out who's traveling there and there's a less than 1% of those hot streams residents use the Monroe off-ramp Partly I think because Danny lives down in these valleys. So you're Going to work and going back home every day. So it's your fault. No, I Oh, it's partly Mr. Gardner's fault, too, now. But it's like 0.86% is our calculation. So Desert Hot Springs will have a factor. So 25% of the funding has to come locally. And it's split up between all the cities on the trips. And so our calculation is going to be around $200,000. So plan for that in the next budget. And then lastly, there's been an amendment that's been asked for by the 29 Palms Band of Mission Indians. CVAG allowed, I want to say around 10 years ago, might have been a little longer, the tribes in the Coachella Valley to join CVAGs, which is made up of all eight cities and Blythe, right, and the county. And so the tribes were coming in, and Agua Caliente was a big player, and then not long after that Torres Martinez, and what's the other tribe? I'm blanking here, but I believe it was four tribes, that participated in CVAG. The 29 Palms Band of Indians had not been able to participate as much, and no one really knew why until they recently, at the meeting before this one, came and asked for an amendment to CVAG's bylaws to allow a non-elected official to sit on the CVAG, which is unprecedented. This has never happened. We've had non-elected officials like city managers and city staff sit on committees, but never on the executive committee. But it was very enlightening to hear that Chairman Mike talked about that the 29 Palms Band of Mission Indians literally has like 12 members. I might be exaggerating a little bit on the low side, but it was less than 20, 20 members and five of them sit on the board and they just, they're, they're really spread thin. So, uh, he's participated in the last two meetings. They've asked for an amendment. Each amendment has to go back to every jurisdiction for approval. And there was a long discussion, not long, but it was lengthy discussion yesterday on what the approval rate needed to be. Cause in the past it was, there was a precedent set that needed to be a hundred percent approval. but they believe it needs to be more of two thirds. So anyways, that's going to come down the pipe as it gets distributed out to each of the member agencies. But we, as a, as a board, a city council will make a decision whether we allow them in, allow that amendment to be made to see bags by law. So just wanted to bring that forward that it will be coming in government fashion. We should see it sometime in 2027. It'll be end of 26 by the time they write it and get it out to the jurisdictions. So it will probably be after the summer break. All right, that's all the updates I have. I know that everybody wants to hear more updates, but we're gonna move on to our administrative calendar. Item number two is a resolution to approve the issuance of the Deseret Hot Springs Community Facilities District Number 2025-2, dash one, sorry. Improvement area one, special bond, tax bonds, series 2026, and certain documents and other actions in connection therewith.

Mr. Buckeye. Yes, thank you, Mayor and council members. We have Michael Bush with Urban Futures here to do a presentation for us.

Thank you, Jeffrey. Good evening, Mr. Mayor, members of City Council. It's been a while. It's good to see you all again. I'm going to be presenting the item for you tonight. I want to recognize, however, your financing team is all sitting right here. So if you have questions, as we go forward, we should be able to address them directly. So the presentation is broken down into three components. We'll talk a little bit about an overview and then we'll talk more specifically about what we're asking this council to approve. And then we'll get some details about the financing and the tentative schedule. As you're all aware, this is related to the SkyBorne development, a project I think I've been involved in since 2007. when it was first being developed. The property in question is a Lennar development. Again, another aspect of SkyBorne. The council has desired to have a national builder come in. They've now come in and they're building quite a few number of homes. This specific development is 286 single-family homes. A majority of which are either been conveyed, 115,000 have been conveyed to homeowners. There are five that are completed and owned by Lennar. They're model homes. There are 18 completed homes waiting. 41 under construction, seven finish lots, which means the foundations are there basically. and then there's 100 lots remaining to be developed. This project will be fully developed based on Lennar's information to us in about 18 months, so February 2028. As a side note, and I know that the council had an interest in a national builder coming to this site, we've recently received some correspondence from their consultant, DPFG, that Lennar would like to annex future villages and continue to build at Skyborne, which I think is good for the city. A little bit about the overview. When the CFD was approved by this council in 2025, with those documents, there was a not-to-exceed bonding amount of $13 million. What's being proposed for you tonight is a not-to-exceed of $10 million, so this will satisfy the capacity, basically, of that bond. The coverage is typical for CFDs that we bring forward to this council, and basically all CFDs industry standard is one and a half times coverage. meaning for every dollar of debt, there's an extra 10 cents that gets collected as coverage to fund any type of expenses that come forward or to handle any slight delinquencies that may come with it. Bond proceeds, we're still kind of working through. The developer has a few options. They can refinance fees that they've paid you. They can finance additional fees that are due to you for these other homes, or they can finance facilities. The reason why I say there's options is, you know, I've reached out to Jeffrey. I'm sure he'll be talking to Danny, if he hasn't already, about whether or not you can spend those monies in three years, since this is a tax-exempt bond. Any development impact fee revenue you receive as a result of this, you have to spend it in three years. So there are some impact fees that without a doubt you will spend in three years, typically road bridge type monies. There was some concern with like aquatic centers, some other things that take a lot more time to build up a balance to do a project. If that is the case, the developer will likely want to refinance reimbursements for actual public improvements that they put in. Cairn Avenue Park would be one example and some other things that Danny and his team may have already reviewed and approved. This transaction also includes a development agreement that allows this city to finance fees for Mission Springs Water District. So there's a joint community facilities agreement with Mission Springs and some of the monies will go to fund Mission Springs equipment and facilities as well as part of this transaction. For you tonight in your staff report there are several attachments with including a resolution which is the detail about the issuance of the bonds that has a not to exceed amounts inside of it. But there's also several other attachments. Some you're probably very familiar with, not just with CFDs, but some of the other city financings that have occurred over the years. There's a preliminary official statement, which is the basically prospectus from the district itself. It is a near final format. It will have a few slight adjustments before it is sent out before we issue in price bonds. There's a bond indenture. There's a bond purchase agreement. There's a continuing disclosure agreement. All pretty standard documents. Mr. Chan is here if you want to have any questions regarding the documents. Lawrence can address those from straddling. The financing details, something we kind of put in here, I think from the past, We've kind of touched on these, but we're going to give you a little more detail, a lot more transparency, I think, tonight. Within your staff report, we're required to include good faith estimates, and so what you see here in this slide are those estimates that are broken out for you to see on the presentation. Of particular note, we referred to a few of them already, that par amount is a little bit less than a not-to-exceed amount. As the market fluctuates, we give ourselves a little bit of room. The true interest cost, again, what we think the interest rate and the bonds will be remember these are 30-year bonds that are non-rated so they typically come with a slightly higher interest rate at the time we put this together interest rates were a little bit higher than where they are today thankfully they've come down on recent weeks or at least the last week We talked a little bit about the coverage in the prior slide. There is a level amount of debt payments. There is a revenue constraint that comes from the taxes from these properties that determine that. And then at Jeffrey's request, we added the per parcel amount that you'll see here for the actual annual levy. There is a variance you'll see there. It's 2,140 to 2,916. That's based on the house. You buy a larger house, you pay a larger assessment. You buy a smaller house, you pay a little smaller assessment. So those are the averages, and that's for the first year. The next slide is a lot more detail I think you've seen. So we broke down all the fees. This is for everyone that's involved in the transaction. These fees are paid from bond proceeds, basically come off the top before the developer receives any reimbursement. A couple things to note in here, which I think you've probably seen before, maybe some of you haven't. The city is always reimbursed for its time on these transactions, so it's a $25,000 reimbursement. reimbursement fee that we put in it's my understanding that just goes right into your general fund to support your time the city manager's time Jeffrey's time etc the other is you'll see a reimbursement in here from to the developer we've had some challenges with Skyborn over the years with payments due from the developer to the city and some delays in receiving those. This year, after some discussions with Jeffrey, we decided to collect those monies up front. So we had them pay for formation costs that were outstanding. It was about $6,000 and there's also the cost for the appraisal. We had them give a deposit of $24,000 for the appraisal. to the city. So they are eligible to be reimbursed for those from their own bond proceeds, basically. So that $30,301 is a representation of those dollars. Typically, the appraisal would get paid at the close of the deal. It is the only contingent component of the financing. This deal would not go forward. Most of your finance team over there, if not all, would not be paid the only person that would be paid would be your appraiser since they finished their appraisal report. So in this case, we wanted them to pay the money up front, which they gladly did. The last slide is a little bit about the schedule. So we are here tonight, June 2nd, presenting the item to you for consideration, interest, any questions you may have. Shortly thereafter, we will be posting the preliminary official statement. And then we will price the bonds in early sometime next week. If the market is favorable, we will certainly do that. And then the plan is to close the transaction before the end of the fiscal year. At that time, the city can draw down its money so it can close the year with those monies in there and the bond proceeds will be left there and the developer will draw them down based on reconciliations they go through with your staff to verify everything is complete. And with that, I'm happy to answer any questions. Your team is here as well if you have any for them as well.

Thank you, Michael. I'll start with, let's start with public comments. Does anybody have any public comments on this item? machine is that a hand yes you're more welcome to come forward do you have a public comment I don't understand what has been requested just come up to the mic in there and you can talk to the City Council what's your request well I would like to speak on behalf of the community that

There has been several proposals for data centers that have gone through.

It's for public comment. This is for this item only. That'll be the last item of the day.

That's what I was asking.

Thank you. Any other public comments on this item? All right. With that said, we're going to move to city council questions and comments. I have a question.

What type of on-site or off-site kind of expenses can the developer use this funds Or what are some examples? Could they use it for street and roads? Is it just public works?

Just whatever they could possibly use. Good question. I'll give you the broad answer, which I think is probably the best one to start the conversation. CFDs are only eligible for public facilities that the city will own. So if it's a road they build, turn over to the city, it can be used for that, parks. any maintenance type of equipment that goes in for water systems, wastewater systems, drainage. So essentially it's whatever it turns over to a public agency, either BU or the water district.

Any other comments?

Ms. Pai?

No other comments, thank you. Did you at least offer them dinner tonight? Offer them a dog? we're gonna keep working on that one yeah yeah all right um there's a recommendation to adopt the resolution is there a motion so moved there's a motion a second away from come up on the screen please vote

Motion passes unanimously.

Item number three is a landscape and lighting maintenance district number one intention proceedings for the levy and collection of assessments. We can all participate in this one. Mr. Buchan.

Yes, thank you. So before you is a resolution declaring the city's intention of levying and collecting an assessment for the citywide landscape and lighting maintenance district number one and a resolution approving the annual engineer's report. regarding the proposed levy. The proceeds for the assessment will be used for park and landscape maintenance. The estimated costs for fiscal year 26-27 are $2,403,453, and the assessments will provide $574,048 in revenue. The remaining $1.8 million in costs will be supplemented by the general fund. The staff recommends the adoption of both resolutions.

Thank you, Mr. Program. Any public comments on this item? Nobody coming forth. Is there any comments from council? Is there a motion? Move. Move the adoption of the resolution one and two. There is a second. All right, please vote.

Motion passes unanimously.

All right, before moving to items four and five, we're going to ask the city council to take both these items because two of the city council members have to recuse themselves. I'm going to recuse myself in landscaping and lighting maintenance district two and drainage assessment district number one. I have a conflict because I live within 500 feet of one of these districts or Yes, I do. And Mr. Pitts, same conflict you live within? Correct. All right. So we're going to recuse ourselves from this. We're going to leave the dais and the media will be turned over to Mayor Potem.

All righty. So moving along to item number four, landscape and lighting maintenance district number two. Recommendation is to adopt a resolution of the council. declaring its intention for a levy and collection of assessments for District No. 2, Zones 1 through 19, and approving an annual engineer's report for the proposed levy, assessments of landscape and maintenance District No. 2, Zones 1 through 19 through fiscal year 26-27. Staff.

Yes, these resolutions are declaring the city's intention of levying and collecting an assessment for the landscape and lighting district number two, as well as a resolution approving the annual engineer's report for the district. The proceeds will be used for landscaping services in the 19 residential zones within the district. Costs for fiscal year 26-27 are estimated to be $324,196, and the revenues Received from the assessments are estimated to be $355,607. Staff recommends adoption of both ordinances.

Okay. Do we have any public comments? Seeing none, all right. Any council discussion and or motion?

I move for staff's recommendations.

Okay. Motion and a second. Away we go. motion passes unanimously perfect i have a question okay all right moving on to number five drainage assessment district number one attention and proceedings for the levy and collection of assessments for the fiscal year 2627 and adopt the resolution for the annual engineer's report for the same thing.

Staff. Yes, before your resolution, declaring the city's intention of levying and collecting assessment for the drainage assessment district number one and a resolution approving the annual engineer's report for the district. Proceeds from the assessment will be used for maintenance of flood control facilities in the 17 residential zones of the district. Costs for fiscal year 26-27 are estimated to be $202,169, and revenue from the assessment is estimated to be $234,265. Staff recommends adoption of both resolutions.

All right. Thank you, Mr. Finance Director. Do we have any public comments? Mr. City Clerk? None? All right. Seeing none, then any council discussion and or motion?

Right. Got a motion?

Got a second? Second. All righty. Away we go.

Motion passes unanimously.

we have no more administrative items that we did have an item number nine pulled from the consent calendar professional services agreement amendment for social action group which is also known as swag who's going to give a report on that that'll be me okay

Good evening, mayor and city council. Uh, the city entered into a professional services agreement effective October 1st, 2024 with social work action group, otherwise known as swag for the operation of the city's crisis stabilization center at the time, the hub. and homelessness outreach program. Following an evaluation of program operations and service utilization, the agreement was amended in May 2025 to eliminate five full-time facility staff positions that were no longer necessary under the revised service model, while retaining four full-time street outreach manager positions. This modification reduced the contract amount from $1,072,000 to approximately $542,000, resulting in savings of more than $400,000. The revised service model better aligns resources with actual operational needs and priorities prioritizes direct outreach engagement and placement services for individuals experiencing homelessness. Tonight, staff is recommending the approval of a new one-year agreement with options for up to three additional one-year extensions for an amount not to exceed $625,000 annually. The proposed contract amount includes flexibility to address future increases in operational costs and allows the city to expand homelessness services as community needs evolve. That concludes my report, and I'm happy to answer any questions.

Thank you. Do we have any public comments on this one? Nobody coming forth. Ms. Pai, you pulled it. You had specific questions?

No, it was just for transparency, and I'd like to make a motion for the recommendations.

And there's a motion and a second. Any other comments from the City Council? All right. As soon as you come up, we'll vote. Motion passes unanimously. All right. We have no other items, but we'll go back to public comments. And Marilyn, it is now your turn. We are in public comments. You have three minutes as soon as you start speaking.

Let's see.

Apologize for screwing up like that. No worries. You're fine. All right. I would like to bring up the Warner Road project. Sorry, not Warner, Varner Road project. It is going to be proposed as a data center. And my problem with it is it's going to take electricity and water from the community as needed. Our prices for power is already way too high as far as I can see. We spent hundred bucks on very little power this last month and I'm worried that that is going to cause it to be even more of a problem. The rest of the nation is having a problem with data centers not only for just those facts but because it's using the data that is gathered by various different tech industries. We're talking anything from Google to Microsoft to anything. And they're taking in all that information and selling it off to someone else. But particularly here, the problem I see with it is that it's using desperately needed water and power, which in a desert it's not really a very easy thing to come by. So that is going to be my main point. One of the things that they've been doing to do this is they'll say it's one project and then they'll sell it off as something else. They'll build a big, gigantic warehouse and only have like three people running it. and all the information that comes into it gets sold off to a different company and then gets sold off to a different company and then down the line. So that is really the biggest problem I have with it. And I see that I have a bit more time, so I'm just going to let that be.

Thank you for your comments. Anyone else like to speak in public comments tonight? don't have anyone else coming forward before we adjourn just want to announce the Planning Commission will meet on the night the Public Safety Commission on the 11th and we'll be back at the City Council regular meeting on the 16th we are adjourned