Finance Update

The City's primary budgets are the 2023/24 Operating Budget and the Capital Improvement Program (CIP).

• The Operating Budget forecasts $78.5 million in Revenues and proposes just under $73 million of Expenditures.

• Another $4 million is allocated to Measure G Reserves.

• Measure G is the transaction and use sales tax that was voted in the fall of 2016 (thank you, LQ residents) and established in April 2017.

• Measure G has provided the City with an additional $15.7 million in revenue.

• These revenues have been used to support Police services and for Capital Improvement Projects (CIP) such as:

  • Highway 111 Corridor Plan Implementation

  • Avenue 48 Art & Music Line

  • Washington Street Connector to Art and Music Line

  • Fritz Burns Park improvements

Sales tax, transient occupancy tax, and property tax continue to be the top three revenue sources that make up over half of the General Fund revenue – basically our operating budget. Combined, these revenues account for about 69% or $54.4 million of the projected General Fund revenue of $78.5 million.

• Sales Taxes $28.4 million

• Transient Occupancy Taxes (TOT) $15 million

• Property Taxes $11 million

The economy has rebounded well the last couple of years, and we depend on that continued strength to fund the critical services we provide to the community. Going forward, as we map our tomorrow, we will proceed prudently and cautiously, keeping in mind the overall delicate financial environment.

Leveraging Grant Funds

• For fiscal year 2023/24, the City funded 23 CIP projects with a total budget of about $18.9 million as summarized below:

  • Measure G sales tax revenues - $6.6 million or 35%

  • General Fund revenues - about $4.9 million or 26%

  • Measure A & SB 1 RMRA funds - nearly $3 million or 14.8%

  • Special revenue funds - about $4.5 million or 24.2%

• Everything in Dark Blue represents Transportation – Roadway

• Light Blue represents Transportation – Pedestrian

• Orange represents Parks and Facilities

• Green represents Landscape Improvements

• Turquoise represents Drainage Enhancements

• Purple represents Traffic Signal Improvements

In addition to capital investment, Long-term planning and fiscal stability remain a priority for La Quinta.

• As a commitment to its employees, the City has funded its outstanding pension and retiree health obligations. Note that the Public Agency average is about 72% funded. By making additional payments, La Quinta has reduced the interest cost by 79% and has saved La Quinta taxpayers nearly $15 million over 20 years. While pension obligations are a moving target, we will continue to address them to ensure we remain fully funded in the years ahead.

• Reserves are 100% funded with a balance of $45 million. A recent analysis was conducted in 2023, which resulted in recommendations to increase several of the reserve categories and pay down the City’s pension liability.

The City has four reserve categories currently funded with a total of $45 million, 100% of the targeted amounts as recommended by our finance team and Financial Advisory Commission and approved by Council.

• Natural Disaster - $15 million

• Economic Disaster - $13 million

• Cash Flow - $5 million

• Capital Replacement - $12 million

Transparency in government is critical to build trust with your residents. In La Quinta, we have continued to provide financial information in a transparent and consistent manner to increase resident engagement on important financial matters. Public transparency and engagement are a cornerstone of the La Quinta culture, we encourage you to view the many online resources dedicated to financial transparency.

Notwithstanding our strong financial and reserve position, we are continually assessing and reassessing, and we will be prepared if we see a reduction in revenues. Annually, the City develops a budget that strives to balance the community’s needs with the financial resources available and, although the economic uncertainty remains, La Quinta is in a solid position to withstand a potential slowing in the economy – as was demonstrated during the pandemic where we assisted our businesses and conducted business remotely to keep City Hall open.

We also heard positive feedback from our Guide to La Quinta, so we are publishing another issue. What is the Guide to La Quinta?

• It’s another resource to promote the City as a destination for Visitors but also to promote local businesses to both residents and visitors.

• The Guide focuses on the pillars of La Quinta as well as shopping and dining options – and includes our Signature Events.

• The guide will be out in March 2024. Options to purchase an ad are now on sale at a low rate to accommodate every business. Visit www.laquintaca.gov/guidetolq for more information.

New Businesses

There’s been a lot of activity in our city from a business perspective, and we wanted to welcome and thank the following new and/or expanded businesses for being part of the Gem of the Desert:

• La Casa de Mariachi

• Art Major (same owner as Kiki’s)

• Jadabug’s Elite Repeat

• El Patio

• The Sandwich Shop

• Panera – expanded from previous location with a Drive-Thru

• RD RNNR – expanded from previous location, now upstairs Old Town

• Cookie Co.

• Kiki’s La Quinta – formerly Slice (same owner as Art Major) – just opened!

• Crumbl

• Desert Wine Shop

• Mathnasium

• Yes Please!

• DSRT Club – Old Town in former RD RNNR location – just opened!

Businesses Opening Soon

And, the businesses soon to open include:

• Longhorn Steakhouse (former Souplantation)

• WDC Kitchen & Bath

• WelBe (Dune Palms, north of Hwy 111)

• Hampton Inn

To recap, we have our Strategic Plan in the works, finances in place, and a strong desire to do business in La Quinta. How do we provide a stable environment for everything to work together?

Police Highlights

• Public Safety Cameras were implemented in September 2021.

• We approved and implemented the Citywide Automated License Plate Reader (ALPR) camera system to help with criminal investigations and protect the citizens and patrons of La Quinta.

• We added a third Motorcycle Enforcement Deputy to address community traffic concerns and improve traffic safety – especially helpful during events with larger crowds.

We continue to lead the valley in property crime solve rates. In 2022, 1,004 property crimes reported and 9.1% solved. ALPRs and Phase 2 of our Public Safety Camera system should help increase that rate into the future.

• We are currently working on the Highway 111 Corridor Specific Plan and Form Based Code. The Highway 111 Corridor Specific Plan is a comprehensive development plan that will guide future development in the Corridor into a mix of commercial and residential uses, create attractive streets while also creating a safe walkable and bikeable environment with a wide range of services, products, entertainment, and activities. 

• La Quinta’s Highway 111 Corridor is a 2.5 mile regional commercial hub in LQ from Washington to Jefferson streets and accommodates about 40,000 pass-through vehicles per day. The Corridor generates over 75 percent of the City’s sales tax revenue. It’s economic resiliency in a changing consumer market is important.  

• The Highway 111 Corridor Specific Plan will feature policies and actions to preserve stable assets, encourage infill development of vacant and underutilized parcels, create jobs, maintain and support existing businesses, and accommodate housing for a variety of income levels; guiding new development in a more streamlined process.

• My personal desire is to ensure we reduce the amount of asphalt parking along the Corridor as new modes of travel will be available in the future.

• The Highway 111 Corridor Specific Plan will also connect and guide development to enhance the new CV Link – a paved pathway that provides access for pedestrians, bicyclists, and low-speed neighborhood electric vehicles (like golf carts) that will run through the entire Coachella Valley.

• In addition to the Corridor Plan, our segment of Highway 111 needs pavement rehabilitation. It’s an expensive endeavor in both funding and time. How does a city pay for a 2+ mile stretch of its main highway with a cost of $8 million or more?

• In March, the City submitted $6 million in funding requests to the U.S. Congress for the Highway 111 pavement rehabilitation project and two water drainage projects. While we didn’t get all projects, Congressman Ken Calvert did select our Highway 111 project and got it approved for the full requested asking amount of $4 million. There are still some formalities to go in Congress and the President must sign the full budget before it is 100% guaranteed but the hard part is over.  La Quinta’s Capital Improvement Project budget, general funds, Measure G funds and reserves will make up the difference to fund the entire project.

• The Highway 111 pavement rehabilitation is anticipated to begin in Spring or Summer 2024 (after Festival season). It will include all two-plus miles of Highway 111 in La Quinta. Existing asphalt will be ripped up and the roadway repaved. This federal funding will pay for about half of the project, estimated at $8 million, and allow the City to work on other needed improvements with the cost savings.

• Construction began in January 2023 on the Dune Palms Road Bridge Improvement Project, estimated to cost up to $30 million.

• The project will replace the existing low water crossing with an all-weather access bridge on Dune Palms Road at the Coachella Valley Storm Water Channel.

• The City has successfully converted our advance construction funding. The interim investment made by the City allowed construction to move forward, and the City is now eligible to receive the Federal Highway Bridge Program construction funding for the project.

• Due to the recent tropical storm damage to the existing bypass road, Dune Palms Road will remain closed while the eastern half of the bridge is constructed – until at least February 2024. This closure will ensure everyone’s safety should another major storm occur and prevent construction delays and additional costs due to the storm damage.

• Weekly project updates and live streaming from the construction site are available for viewing on the project website, www.laquintaca.gov/dunepalms.

These are exciting projects that don’t happen overnight, but have been part of the vision and plan for “La Quinta’s Tomorrow.”

Improvements and additional amenities at Fritz Burns Park have been identified as priorities by residents during the past few Community Workshops.

• Community Outreach – Two online surveys and one in-person community meeting have been conducted.

• The conversion of two tennis courts to eight pickleball courts and replacement of shade structures was completed early this summer.

• The Fritz Burns Park Master Plan was approved by the City Council on September 19.

• Engineering and Design is now underway for the three-phased project.

The master plan includes:

• Plaza with public art play element, seating, and shade.

• Expanded playground with new equipment, shade, lighting, and drinking fountains.

• Restroom building.

• Tree lined promenade with seating and picnic tables.

• Bicycle racks and tune-up station.

• Modified existing parking lot.

• New parking lot with tree islands.

• Electric Vehicle charging stations.

• New water playground with wading pool.

• Expanded pool deck with shade and seating.

• Expanded pool equipment area.

• In March 2022, Council approved an agreement with architecture firm HGA to design the La Quinta Cultural Campus which includes the La Quinta Museum, Casita, and Lumberyard Building.

• After presenting their initial concepts to City Council and refining their designs based on feedback from Council, museum staff, and the La Quinta Historical Society, HGA was granted approval to begin work on the second phase of the project which includes creating schematic drawings.

• HGA will now focus on generating drawings for the key components of the Cultural Campus which includes creating an open and welcoming entryway/arts promenade, reconfiguring the museum to be more efficient for staff, and designing the “oasis” which is an outdoor space capable of hosting small events and educational workshops. 

• Additionally, HGA will continue designing a new archive building which will branch off the museum. This space will allow the Historical Society to properly house the array of artifacts they currently have and continue to collect. 

• Staff will continue collaborating with HGA and present an update towards the end of the year.

These are exciting projects that complement our strong financial position, safe city, business demand, infrastructure and overall quality of life.  I would now like to turn it back over to Mayor Linda Evans to share a few more items on La Quinta’s “to do” list.

Developer Robert Green will be providing the City Council and public an update on Talus at an upcoming meeting. The main delay remains the same:  securing the amount of financing needed with the changed post-COVID market of high interest rates, supply chain issues, and workforce needs. Montage remains committed to being in La Quinta and we are positive that the project will move forward to completion.

Sphere of Influence Update

La Quinta’s Sphere of Influence is the unincorporated area just outside the City’s southeast border. The area is largely made up of the Vista Santa Rosa community and is identified in the City’s General Plan for possible expansion of our boundaries for future development.

The City has prepared a fiscal impact analysis to consider the costs and revenues if we expand our boundaries and how it would affect City services such as public safety, roads, and infrastructure improvements. We continue to evaluate what annexation might look like, the timeline and process, and additional fiscal impact. We are also beginning public outreach with the Vista Santa Rosa community to hear their concerns and desires for the future of their community.