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2024 12 17 CC MinutesCITY COUNCIL MINUTES TUESDAY, DECEMBER 17, 2024 CALL TO ORDER A regular meeting of the La Quinta City Council was called to order at 3:00 p.m. by Mayor Evans. PRESENT: Councilmembers Fitzpatrick, McGarrey, Pena, Sanchez, and Mayor Evans ABSENT: None PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA CONFIRMATION OF AGENDA City Manager McMillen requested to pull Consent Calendar Item No. 8, regarding the Miles Avenue Pavement Rehabilitation Project No. 2023-01, and consider it as Business Session Item No. 3 on tonight's agenda. Council concurred. CLOSED SESSION 1. CONFERENCE WITH LEGAL COUNSEL — EXISTING LITIGATION; PURSUANT TO PARAGRAPH (1) OF SUBDIVISION (D) OF GOVERNMENT CODE SECTION 54956.9; CASES NAMES AND NUMBERS — MULTIPLE (listed below, all in U.S. Bankruptcy Court, District of Delaware) CASE NAME: CASE NUMBER SilverRock Development Company, LLC 24-11647 SilverRock Lifestyle Residences, LLC 24-11648 SilverRock Lodging, LLC 24-11650 SilverRock Luxury Residences, LLC 24-11652 SilverRock Phase I, LLC 24-11654 RGC PA 789, LLC 24-11657 COUNCIL RECESSED THE OPEN SESSION PORTION OF THE MEETING AND MOVED INTO CLOSED SESSION AT 3:02 P.M. MAYOR EVANS RECONVENED THE OPEN SESSION PORTION OF THE CITY COUNCIL MEETING AT 4:05 P.M. WITH ALL MEMBERS PRESENT CITY COUNCIL MINUTES Page 1 of 10 DECEMBER 17, 2024 REPORT ON ACTION(S) TAKEN IN CLOSED SESSION: City Attorney Ihrke reported the following pursuant to Government Code section 54957.1 (Brown Act): • CLOSED SESSION ITEM NO. 1 — no new reportable action on this matter; a brief summary of the bankruptcy proceedings status for SilverRock Development Company and its affiliates will be provided under the Announcements, Presentations, and Written Communications section of the Agenda, as Presentation No. 1. Council's authorization remains in place for the City Attorney, in coordination with the City Attorney's Office, to defend and protect the interests of the City in the multiple bankruptcy cases filed by SilverRock Development Company and its responsive affiliates as reported out for Closed Session Item No. 2 from the August 6, 2024 Council meeting. PLEDGE OF ALLEGIANCE Mayor Evans led the audience in the Pledge of Allegiance. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA PUBLIC SPEAKER: Philip Bettencourt, La Quinta — said it was a pleasure serving on the Imperial Irrigation District (IID) Coachella Valley Energy Commission (CVEC) as the appointed at -large Commissioner. PUBLIC SPEAKER: Kyndra Wright, La Quinta — introduced herself; praised the City of La Quinta; and spread holiday cheer. ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS 1. TALUS DEVELOPMENT PROJECT (FORMERLY SILVERROCK) - STATUS UPDATE Mayor Evans noted that the "Talus" signs were recently removed due to the ongoing bankruptcy proceedings and the City will revert back to referring to this project as "SilverRock" again until this matter is resolved. City Attorney Ihrke said on August 5, 2024, SilverRock Development Company LLC and its affiliates, collectively referred to as "SDC," voluntarily petitioned for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware; and per Council's direction and approval, the City retained Special Counsel who has continuously been working with the City Manager and City Attorney throughout these proceedings. Prior Announcements regarding the bankruptcy case are available on the City's website at www.laquintaca.gov/taluslq. CITY COUNCIL MINUTES Page 2 of 10 DECEMBER 17, 2024 Mr. Ihrke said he provided a lengthy report -out of Council's official action at the December 11, 2024, special meeting, summarizing the substantive provisions and public purposes relating to a Term Sheet for Debtor -In -Possession (DIP) Financing Facility, with attachment thereto that includes a Memorandum of Understanding (MOU) and City - approved final budget, and are collectively referred to as the "Term Sheet;" this report - out would not be repeated, however the public may access and listen to the meeting on at https://laquinta.cablecast.ty/?site=1 (also at www.laquintaca.gov/pastmeetings). Mr. Ihrke provided the following summary update: • The Term Sheet included the City's proposed not to exceed $11 million dollar loan as part of the Final DIP Financing, which will be funded only upon approval by the U.S. Bankruptcy Court; the loan will be what is known as a "priming" loan under federal bankruptcy law, which means the City will have a "super -priority" security interest for the repayment of the loan, including "super -priority" over all liens on the real and personal property held by the debtors, subject to limited "carve -outs" as set forth in the Term Sheet; this type of "super -priority" is perhaps the most secured type of loan available under federal and state law. • The Term Sheet was executed (on December 10, 2024) by the City and SDC, and was filed with the U.S. Bankruptcy Court for hearing and consideration; the hearing is set for January 2, 2025, which hearing may be continued until January 15, 2025, to consolidate the hearing on the proposed Final DIP Financing/Term Sheet with another important matter, the appointment of a brokerage firm to assist the Chief Restructuring Officer (CRO) as fiduciaries of the debtors, which as previously announced, is now entirely controlled by former bankruptcy Judge Christopher Sontchi. The appointment of a brokerage firm is an important step and common protocol under bankruptcy proceedings to ensure there is a thorough analysis and vetting for the selection of the next developer of the project. As noted in the Term Sheet, the CRO, SDC and its affiliates, and the City are required to be in constant communication during the bankruptcy process, and the City has the right to consent to or reject the sale of the project to any developer/purchaser proposed by the debtors. • Since the December 11, 2024, special Council meeting, the Mayor and Councilmembers, individually and without a quorum of three or more present, met with CRO representatives and former Judge Sontchi. In accordance with the Brown Act (Gov. Code, § 54950 et seq.), there was no sharing of information or discussion of information among the Council, thereby ensuring there was no "serial" meeting, as defined, among the Council. • Regarding the City -led Interim DIP Financing and funds that have been made available to the CRO pending the U.S. Bankruptcy Court review of the proposed CITY COUNCIL MINUTES Page 3 of 10 DECEMBER 17, 2024 Final Order on the DIP Financing/Term Sheet, the following new items can be reported and summarized as follows: ✓ Based on communications from the CRO, RD Olson Construction Company, which was the primary contractor of the project, is anticipated to mobilize in early January 2025 to clean-up, repair, and secure and stabilize the exposed structures and take other City -approved actions to prepare the site for future development to resume, when the bankruptcy proceedings reach that point. ✓ Based on communications with the CRO, an independent consultant, the Cumming Group, has been retained by the CRO to prepare an impartial and professionally based "Property Condition Report"; this report is key for the City, CRO, and all parties to receive an independent accounting by an independent fiduciary of the costs necessary to complete the project by a future developer; the report is anticipated to be completed in February 2025. City Manager McMillen said earlier today, following the independent meetings of individual Councilmembers with former Judge Sontchi, Mr. McMillen visited the Talus project site accompanied by Mr. Sontchi, the CRO, and a member of the Cumming Group, who will be completing the Property Condition Report, as mentioned by the City Attorney. Mr. McMillen noted this report is imperative for the eventual marketing of the project, and anyone interested in bidding the project would rely on this report, which will be very detailed, and will require multiple visits from various experts to evaluate all aspects of the project and what has been constructed on the site to date; many of the structures have been partially constructed and exposed to the elements, and the condition of the structures will determine the actual value of the project; and the report is anticipated to be completed in February 2025. Mr. McMillen noted all parties visiting the site today appreciated the beautiful scenery; the City and all relevant parties are motivated to get the project completed. Mayor Evans reiterated that all up-to-date information pertaining to this project, formerly Talus, now referred to as SilverRock is available on the City's website at www.laquintaca.gov/taluslq. 2. RECOGNIZE DISTINGUISHED CITIZEN AWARD RECIPIENTS Management Specialist Calderon provided a brief background on the newly established Distinguished Citizen Award program; the updated monument to be installed at the Civic Center Park to bear the names of the recipients of this program; and presented the qualifications and accomplishments of the two award recipients John (Juan) Salas and Will Donato. Council presented Mr. Salas and Mr. Donato with certificates of recognition and plaques in honor of their dedication and contributions to the La Quinta community. CITY COUNCIL MINUTES Page 4 of 10 DECEMBER 17, 2024 CONSENT CALENDAR 1. ADOPT ORDINANCE NO. 619 ON SECOND READING AMENDING CHAPTER 3.25 OF THE LA QUINTA MUNICIPAL CODE RELATED TO SHORT-TERM VACATION RENTALS 2. ADOPT RESOLUTION DECLARING ASSESSOR PARCEL NUMBER 600-020- 057 LOCATED IN THE CITY OF LA QUINTA, CALIFORNIA, AS SURPLUS LAND; CEQA: EXEMPT FROM ENVIRONMENTAL REVIEW PURSUANT TO SECTION 15312 OF THE CALIFORNIA ENVIRONMENTAL QUALITY ACT [RESOLUTION NO. 2024-047] 3. APPROVE AMENDMENT NO. 3 TO AGREEMENT FOR CONTRACT SERVICES WITH VINTAGE ELECTRIC FOR ON -CALL ELECTRIC SERVICES 4. APPROVE AMENDMENT NO. 3 TO REIMBURSEMENT AGREEMENT WITH COACHELLA VALLEY ASSOCIATION OF GOVERNMENTS FOR DUNE PALMS BRIDGE IMPROVEMENT PROJECT NO. 2011-05 5. ACCEPT SPORTS COMPLEX LIGHTING REPLACEMENT PROJECT NO. 2022-04, LOCATED AT THE LA QUINTA SPORTS COMPLEX ON PARK AVENUE 6. ACCEPT CITY HALL ROOF REPAIR PROJECT NO. 2023-32, LOCATED AT THE CITY OF LA QUINTA CITY HALL 7. ACCEPT EISENHOWER BASIN SLOPE REPAIR PROJECT NO. 2023-22, LOCATED ON THE WEST SIDE OF EISENHOWER DRIVE BETWEEN AVENIDA FERNANDO AND COACHELLA DRIVE Pulled from Consent Calendar by staff and considered as Business Session Item No. 3 »> APPROVE: (1) TRANSFER OF FUNDS AND PROJECT NO. 2023-01 FROM AVENUE 58 IMPROVEMENTS TO MILES AVENUE PAVEMENT REHABILITATION; AND (2) PLANS, SPECIFICATIONS, ENGINEER'S ESTIMATE, AND ADVERTISE FOR BID THE MILES AVENUE PAVEMENT REHABILITATION PROJECT 9. AUTHORIZE OVERNIGHT TRAVEL FOR CITY CLERK ADMINISTRATIVE TECHNICIAN TO ATTEND THE CITY CLERK'S ASSOCIATION OF CALIFORNIA "NUTS AND BOLTS" WORKSHOP IN BREA, CALIFORNIA, FEBRUARY 6-7, 2025 10. AUTHORIZE OVERNIGHT TRAVEL FOR HUMAN RESOURCES DEPUTY DIRECTOR AND HUMAN RESOURCES TECHNICIAN TO ATTEND THE PUBLIC AGENCY RISK MANAGEMENT ASSOCIATION 2025 CONFERENCE IN ANAHEIM, CALIFORNIA, FEBRUARY 23-26, 2025 CITY COUNCIL MINUTES Page 5 of 10 DECEMBER 17, 2024 11. AUTHORIZE OVERNIGHT TRAVEL FOR HUMAN RESOURCES DEPUTY DIRECTOR TO ATTEND THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY 2025 SUPERVISOR ACADEMY CONFERENCE IN SAN DIEGO, CALIFORNIA, JANUARY 13-16, 2025 12. EXCUSE ABSENCE OF COMMISSIONER PALTIN FROM DECEMBER 11, 2024, QUARTERLY HOUSING COMMISSION MEETING 13. APPROVE RECIPIENT OF THE 2025 LA QUINTA SENIOR INSPIRATION AWARD 14. RECEIVE AND FILE FISCAL YEAR 2023/24 MEASURE G SALES TAX COMPLIANCE REPORT 15. RECEIVE AND FILE FIRST QUARTER FISCAL YEAR 2024/25 TREASURY REPORTS FOR JULY, AUGUST, AND SEPTEMBER 2024 16. RECEIVE AND FILE EXPENDITURE REPORT DATED JUNE 30, 2024 17. APPROVE DEMAND REGISTERS DATED NOVEMBER 15, 22, AND DECEMBER 6, 2024 18. RECEIVE AND FILE FISCAL YEAR 2023/24 DEVELOPMENT PROJECT FEE REPORT 19. RECEIVE AND FILE FISCAL YEAR 2023/24 ART IN PUBLIC PLACES ANNUAL REPORT 20. ADOPT RESOLUTION AND APPROVE MEMORANDUM OF UNDERSTANDING WITH RIVERSIDE COUNTY OBLIGATING AND ALLOCATING AMERICAN RESCUE PLAN ACT CORONAVIRUS STATE AND LOCAL RECOVERY FUNDS [RESOLUTION NO. 2024-048] CONSENT CALENDAR ITEM COMMENTS ITEM NO. 4 — Councilmember Fitzpatrick noted the increased cost of capital projects such as the Dune Palms bridge improvements. ITEM NO. 14 — Councilmembers Fitzpatrick and McGarrey and Mayor Evans thanked residents for approving Measure G sales and transactions use tax and noted the capital improvements, infrastructure, and services it funds. WRITTEN PUBLIC COMMENTS were received on Consent Calendar Item No. 19, related to fiscal year 2023/24 Art in Public Places Annual Report, from the Desert Valley Builders Association noting the City has satisfied and met its annual reporting obligation CITY COUNCIL MINUTES Page 6 of 10 DECEMBER 17, 2024 pursuant to the La Quinta Municipal Code and the Mitigation Fee Act, which were distributed to Council, made public, published on the City's website, and included in the public record of this meeting. MOTION — A motion was made and seconded by Councilmembers Pena/McGarrey to approve Consent Calendar Item Nos. 1-7 and 9-20 as presented, with Item No. 1 adopting Ordinance No. 619, and Item Nos. 2 and 20 adopting Resolution Nos. 2024-047 and 2024-048, respectively. Motion passed unanimously. BUSINESS SESSION 1. APPROVE AGREEMENT FOR CONTRACT SERVICES WITH SOUTHSTAR ENGINEERING AND CONSULTING, INC. TO PROVIDE CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES FOR HIGHWAY 111 REHABILITATION PROJECT NO. 2022-25 Public Works Director/City Engineer McKinney presented the staff report, which is on file in the Clerk's Office. Council discussed the project schedule was pushed for after high season due to the delay in receiving the awarded federal funding; and importance of implementing a communication program to alert residents and businesses. MOTION — A motion was made and seconded by Councilmembers Fitzpatrick/McGarrey to approve an Agreement for Contract Services with Southstar Engineering and Consulting, Inc. to provide construction management and inspection services for the Highway 111 Rehabilitation Project No. 2022-25; and authorize the City Manager to execute the agreement within the approved budget. Motion passed unanimously. 2. APPROVE THE PURCHASE OF A LIBRARY RESOURCE VAN Community Services Deputy Director Calderon introduced Management Analyst Calderon who presented the staff report, which is on file in the Clerk's Office. PRESENTER: Sara DeLaCruz, Branch Manager III, Riverside County Library System — provided an overview of the proposed bookmobile services, targeted audience, research data gathered to identify community needs, staffing, and collaboration efforts with other agencies and school districts. PRESENTER: Joan Tyler, Chief Librarian, Riverside County Library System — provided start-up and operational cost options. Council discussed teaching books; outreach; school partnerships; van staffing; van electrical power; Wi-Fi options; grants; cost and types of guest performers; flexibility of schedule; demand for services; summer versus winter schedule; coordination with free school summer breakfast and lunch program; city -owned building on Eisenhower Drive; CITY COUNCIL MINUTES Page 7 of 10 DECEMBER 17, 2024 security and storage for van and valuable items; availability of digital library cards; use of student ID cards as library cards; auto, employee, property and liability insurance costs; currently four vans serve the entire Riverside County; this van will be dedicated to La Quinta only — first city to have its own bookmobile; branding on van indicating exclusivity to, and funded by La Quinta; role of schools to provide literacy programs; high cost of van and services; ability to change with need; means of measuring success; and van treated as a branch for statistical analysis. MOTION — A motion was made and seconded by Councilmembers McGarrey/Sanchez to approve: (1) Option 2 "Enhanced One -Time (Start -Up) Costs" of $280,000 for the purchase of the resource van/bookmobile and relate fees, insurance, materials, supplies, equipment, IT services, subscriptions, etc.; and (2) Option B annual service level at $396,800 as presented in Attachment 2 of the staff report. Motion passed unanimously. 3. Pulled from Consent Calendar Item No. 8 by staff and moved to Business Session »> APPROVE: (1) TRANSFER OF FUNDS AND PROJECT NO. 2023-01 FROM AVENUE 58 IMPROVEMENTS TO MILES AVENUE PAVEMENT REHABILITATION; AND (2) PLANS, SPECIFICATIONS, ENGINEER'S ESTIMATE, AND ADVERTISE FOR BID THE MILES AVENUE PAVEMENT REHABILITATION PROJECT Public Works Director/City Engineer McKinney presented the staff report, which is on file in the Clerk's Office. Council discussed longevity and cost of pulverization process; current street rating of Miles Avenue; condition of landscaping on Miles Avenue; needs and timing of Avenue 58 stretch; and direction to include total spending on City roads in related staff reports. MOTION — A motion was made and seconded by Councilmembers Sanchez/Fitzpatrick to (1) approve transfer of funds and project number 2023-01 from Avenue 58 Improvements to be used for the Miles Avenue Pavement Rehabilitation, and (2) approve plans, specifications, and engineer's estimate, and authorize staff to advertise for bid the Miles Avenue Rehabilitation Project No. 2023-01. Motion passed unanimously. STUDY SESSION — None PUBLIC HEARINGS — None DEPARTMENTAL REPORTS — All reports are on file in the City Clerk's Office. 7-B. PUBLIC SAFETY — POLICE QUARTERLY REPORT JULY — SEPTEMBER 2024 Lieutenant Velasco with Riverside County Sheriff's Department explained the reasons for the delay in response times for July and August 2024 were due to two calls whose priority was changed, however, the metrics system counts the entire time the call was being handled in its final priority level, even though initially the call was at a lower priority level; CITY COUNCIL MINUTES Page 8 of 10 DECEMBER 17, 2024 noted the processes and monitoring established to ensure La Quinta designated resources are managed and dispatched to benefit La Quinta residents who pay for the service; mutual aid provided to surrounding areas; and staffing shortages. Council discussed the County increasing the staff servicing the County's unincorporated areas; and appreciation for recognizing and correcting response times. MAYOR'S AND COUNCIL MEMBERS' ITEMS Mayor Evans reported on her, and other Councilmembers' attendance at the AMEX Media Day; Sponsor Day; Chamber of Commerce Day at PGA West; annual Tree Lighting events; Indian Wells -La Quinta 2024 Ironman 70.3 event; annual Casita Lighting; Blue Light Ceremony; Shop -with -a -Cop; PGA Superstore opening; Pancakes with Santa event; Boys & Girls Club reception; Volunteers in Medicine Gala; and La Quinta Board Mixer event at Los Arcos restaurant. Councilmember Sanchez reported on his attendance at the Desert Horse event. REPORTS AND INFORMATIONAL ITEMS La Quinta's representative for 2024, Mayor Evans reported on her participation in the following organizations' meetings: • CVAG COACHELLA VALLEY CONSERVATION COMMISSION • VISIT GREATER PALM SPRINGS CONVENTION AND VISITORS' BUREAU • IMPERIAL IRRIGATION DISTRICT — CV ENERGY COMMISSION • DESERT SANDS UNIFIED SCHOOL DISTRICT 2x2 COMMITTEE (Evans & Sanchez) La Quinta's representative for 2024, Councilmember Fitzpatrick reported on her participation in the following organizations' meetings/organization's meeting: • ANIMAL CAMPUS COMMISSION (attended on behalf of delegate Sanchez) • RIVERSIDE COUNTY TRANSPORTATION COMMISSION La Quinta's representative for 2024, Mayor Pro Tem McGarrey reported on her participation in the following organization's meeting: • LEAGUE OF CALIFORNIA CITIES — EXECUTIVE COMMITTEE, RIVERSIDE COUNTY DIVISION La Quinta's representative for 2024, Councilmember Pena reported on his participation in the following organizations' meetings: • COACHELLA VALLEY MOSQUITO AND VECTOR CONTROL DISTRICT BOARD OF TRUSTEES • SUNLINE TRANSIT AGENCY La Quinta's representative for 2024, Councilmember Sanchez reported on his participation in the following organizations' meetings: CITY COUNCIL MINUTES Page 9 of 10 DECEMBER 17, 2024 • DESERT SANDS UNIFIED SCHOOL DISTRICT 2x2 COMMITTEE (Evans & Sanchez) • SO. CALIFORNIA ASSOCIATION OF GOVERNMENTS REGIONAL COUNCIL Council directed a letter be drafted to the Coachella Valley Unified School District listing the Council's questions and concerns, since requests for meetings have not been successful. ADJOURNMENT There being no further business, a motion was made and seconded by Councilmembers Sanchez/McGarrey to adjourn at 6:27 p.m. Motion passed unanimously. Respectfully submitted, MONIKA RADEVA, City Clerk City of La Quinta, California CITY COUNCIL MINUTES Page 10 of 10 DECEMBER 17, 2024