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April 12, 2016 — April Regular Elections

— City Funding for Coachella Valley LinkAdvisory Question —

Local

City of Rancho Mirage
Measure 3 Advisory Question - Majority Approval Required

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If CV Link were to be constructed, would you approve the City Council committing Rancho Mirage to pay for CV Link's annual operations and maintenance expenses, which on April 6, 2015, CVAG projected Rancho Mirage's share to be between $110,300 and $251,800 per annum as of the 9th year of operations, and continuing to increase annually at the rate of inflation?

Impartial analysis / Proposal

The City of Rancho Mirage is authorized pursuant to California Elections Code Section 9603 to hold an advisory election for the purpose of enabling qualified voters of the City of Rancho Mirage to voice their opinions on substantive issues pertaining to the proposed CV Link project. As such, the results of Measure 3 will provide an indication of general voter opinion regarding whether the City Council should commit the City of Rancho Mirage to pay up to $251,800 per year commencing the 9th year, and increasing thereafter approximately 2% per year, for the maintenance and operation of Phase 1 of CV Link. 

CV Link is a paved pathway proposed by the Coachella Valley Association of Governments (CVAG), which will accommodate pedestrians, bicycles, Low-Speed Electric Vehicles (LSEVs) and Neighborhood Electric Vehicles (NEVs) that can travel up to 25 miles per hour. Initially, CV Link will be approximately 50 miles long, extending from Highway 111 and the Chino Wash in North Palm Springs to Airport Boulevard in the City of Coachella and the unincorporated community of Thermal. This is known as Phase 1 of CV Link. Phase 1 (approximately 50 miles) is anticipated to begin construction in 2017 and includes the majority of construction for the core route of CV Link between Palm Springs and Coachella. 

The March 2015 CV Link Master Plan and the April 6, 2015, CVAG Transportation Committee Staff Report estimate that the annual cost of maintenance and operation for the first phase of CV Link will be $1.6 million, which amounts to $33,600 per mile for the initial (approximately) 50 miles of CV Link, which CVAG expects to increase by 2% every year due to inflation. 

"Maintenance" includes but is not limited to sand and debris removal, street sweeping, concrete repair, clearing drainage channels and culverts, graffiti removal, light maintenance and landscaping. "Operations" include but are not limited to electricity, water, events, promotions, website maintenance, management, administration, dispatch and security. 

In the April 6, 2015, CVAG Transportation Committee Staff Report, CVAG proposes that the City of Rancho Mirage pay into the CV Link Operations & Maintenance Fund on an annual basis an amount equal to 8% of the incremental growth in the City's Transient Occupancy Tax (commonly known as the "hotel bed tax"), adjusted for inflation over time, which CVAG estimates will reach between $111,322 and $251,871 per year commencing the 9th year, and increasing thereafter by approximately 2% per year.

— Steven B. Quintanilla, Rancho Mirage City Attorney

Arguments FOR

A detailed report of the operation & maintenance (O&M) cost have been conducted by private professional companies and reviewed last April by the CVAG Executive Committee. The report estimated future O&M cost for maintaining the entire 50 mile route to be $1,063,900 per year. That is $21,260 per mile per year which is on par with what is now being paid for trail maintenance in the area.

The numbers cited in Measure 3 are a gross mischaracterization of what was in that report.

As one of the most well off cities in the country, Rancho Mirage will continue to maintain its facilities in top notch shape. Any cost of operating and maintaining CV Link that Rancho Mirage might be asked to cover in the future will be a very small cost compared to other roads, city parks, library and buildings the city cares for.

There's a good chance that cities will not need to consider funding O&M cost as the concert promoter for Coachella and Stagecoach has shown interest in paying O&M for CV Link.

The April report referred to in the ballot question, proposed that since CV Link will boost tourism, CVAG asked cities to discuss the pros and cons of using a small part of the increased revenue from these tourists to offset the O&M costs. The plan was never taken up by any committee. However, paying for O&M cost through the increase due to the CV Link through the Hotel tax is a great idea. Wouldn't you rather have visitors pay for it?

A responsible City Council would work with the region to find a fair and reasonable way to pay for the O&M of a regional facility. www.FriendsofCVLink.com

Of course we want the CV Link maintained. VOTE YES ON MEASURE 3.

— City of Rancho Mirage

Arguments AGAINST

Measure 3 assumes that with or without the approval of Rancho Mirage, the CV Link gets constructed. Do the Operations and Maintenance (O&M) expenses appear reasonable, if the city were to consider joining?

Coachella Valley Association of Governments (CVAG) leadership still has not settled on a plan or formula that lays out the amount of annual O&M each city would be responsible for paying. One plan was recommended by the CVAG Executive Director on Apri16, 2015, but it has not yet been voted on by the CVAG Executive Committee. That plan is the progressive bed tax formula which projects Rancho Mirage's share, as of the 9th year of operation, to be between $110,300 and $251,800. It would increase annually based on that formula. This plan has five cities (Palm Springs, Palm Desert, Indian Wells, Rancho Mirage and La Quinta) paying about 90% of the entire O&M expense.

Another approach is based on CV Link miles in a given city. CVAG's retained experts calculated that "Total Per Mile" cost of O&M amounts to $33,600 per mile of CV Link. Thus, a city with 5 miles of CV Link within it, its O&M expense would be $168,000 per year. Few cities are capable of absorbing such a long-term financial burden.

The financial problem is further exacerbated; What happens if the nine jurisdictions agreed on the amount of O&M expense each would assume, and later a city decides it can no longer tolerate the financial burden? How would that affect Rancho Mirage's annual amount? Or, if a city files for bankruptcy and leaves the program, who picks up that financial slack? Or if some private LLC or other business entity contracted to assume some or all of the O&M burden but later quit paying for any of a number of reasons?

We recommend a "No" vote on Measure 3.

— City of Rancho Mirage

Replies to Arguments FOR

The following individuals signed the official rebuttal in favor for Measure 3:

  • Gary Lueders, Vice President of Friends of CV Link 
  • Larry Parish, Retired CEO in Riverside County 
  • Robert Brockman, Former Rancho Mirage Community Development Director 
  • David Fierstone, Desert Bicycle Club Member 
  • Roger Snoble, Retired CEO of Los Angeles County Metropolitan Transportation Authority

The Council opens their argument with "assumes." That's precisely the problem: The Council makes many wrong assumptions to craft their arguments. 

Their argument cherry-picked a single number out of a complicated, 11-page report and assumed a number out of context. It highlighted a single sentence from a 167-page master plan and assumed they knew what it meant. Worse yet, they assume that voters should be swayed by out- of-date projections. 

The Council makes assumptions because THE FACTS don't support their argument: 

  • The current cost projections show the per-mile cost of CV Link is on par with what Rancho Mirage and other cities are already paying for local trails. 
  • The Coachella Valley Association of Governments has outlined about 2 dozen options to pay for long-term costs. But since the route is still being finalized, the Executive Committee - including the City of Rancho Mirage - has held off on picking the best option. 
  • CVAG never asked any city for a contribution. 
  • Private-sector interests have already shown interest in paying for any long-term costs.

The Desert Sun has highlighted Mayor Hobart's exaggerations, stating that he "swung and missed" with his inflated projections about the long-term costs. If previous councils had used these exaggerations and scare tactics, we would have never had the vision to connect the Valley with Highway 111.

VOTE YES ON MEASURE 3. 

— City of Rancho Mirage

Replies to Arguments AGAINST

The following individuals signed the official rebuttal argument against Measure 3:

  • Dana Hobart, Mayor of Rancho Mirage 
  • Ted Weill, Mayor Pro-tem of Rancho Mirage 
  • Richard W. Kite, City Council Member 
  • Iris M. Smotrich, City Council Member
  • Charles Townsend Vinci, City Council Member

CV Link financial figures concerning Operations and Maintenance published before

May 1, 2015, though vastly understated, are, nevertheless substantially more reliable than CVAG's figures appearing in recently revised documents, created after Rancho Mirage began challenging the accuracy of the original O&M projections. 

After Rancho Mirage's detailed criticisms of CVAG's O&M projections, CVAG went through a sham reduction exercise, claiming to have reduced the original $1,616,900 figure to $1 ,000,000. Cities accepting that deception do so at their peril! 

To distinguish fact from fiction, reviewing three documents is essential. (1) The March 2015 Master Plan; (2) the April 6, 2015 Transportation Committee Staff Report by Executive Director Tom Kirk entitled "Recommendation: Approve an Agreement to Establish and Fund CV Link Operations and Maintenance Fund"; and (3) another April 6, 2015,Staff Report, "Recommendation: Approve Adoption of Final CV Link Master Plan". 

CVAG's retained experts established Operations and Maintenance costs at $1,616,900
for the first full year of operations. That figure appears in both the "Final CV Link Master Plan" (March 2015 Edition) and Mr. Kirk's "Recommendation" document. (Actually, even $1.6M substantially understates this expense because CVAG omits costs for liability insurance, ambulance, police or security expenses, and stupendously understates costs related to operations.) 

Mr. Kirk's "recommended" formula to cover O&M expense has Rancho Mirage's share at $22,842 in year one, increasing annually. By year nine our annual share rises to between $111,322 and $251,871, continuing upward for the 75-year projected life of CV Link. 

Rancho Mirage is fiscally strong because we carefully evaluate financial risks. Should we jeopardize future residents with such open-ended debt obligations?

City Council Recommendation: Vote NO. 

— City of Rancho Mirage
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