While things got tough in 2020 as Indian Wells weathered the COVID-19 pandemic and the loss of up to $9.7 million in revenue as tourism – its top revenue-earner – was hit hard, Mayor Richard Balocco touted the city’s efforts over time to continue to build up its reserves.
“This past year has shown us the importance of planning ahead,” Balocco said. Councils over the past several years have been setting aside a portion of its surplus revenues in an emergency reserve fund which is now at about $2.3 million – none of which was used during the pandemic, he said.
“Through all the challenges of 2020 and 2021, residents have shown their resilience from the pandemic as evidenced on how tight-knit you truly are. I couldn’t be prouder of Indian Wells residents,” Balocco said during Wednesday’s state of the city address at the Renaissance Esmeralda.
More than 100 attended the State of the City & Hospitality Awards luncheon, including elected officials from other cities and Riverside County. The event was hosted for the first time by the Greater Coachella Valley Chamber of Commerce.
It was the city’s first in-person state of the city in two years, due to the pandemic.
“It’s almost like we’ve forgotten what it’s like to have events, huh?” said Balocco.
The mayor was joined by other council members in Wednesday’s presentations which highlighted the city’s fiscal outlook, public safety and tourism.
The pandemic dealt deep blows to all, and the city’s staff worked tirelessly, Balocco said, reducing spending and making budget changes where necessary as revenues dropped with the cancellation of the 2020 BNP Paribas Open at the Indian Wells Tennis Garden, the Coachella and Stagecoach music festivals for 2020 and 21 and other major events that drive tourism – roughly 65% of the city’s annual revenue.
The city avoided using any of the $40 million it has in reserves and trimming staff, but cut costs at City Hall and reprioritized capital improvement projects, moving some to a later date.
The city also delayed a planned donation of $1 million to Eisenhower Health, but will be donating $2.5 million over the next two years for equipment and other upgrades and improvements to the hospital’s cardiology program.
The funds will come from repayment of $17.4 million in redevelopment agency funds taken by the state when it dismantled the agencies in 2011.
The city budgets two years at a time. In the current fiscal year, 2021-22, the city is projecting general fund revenues of $18.1 million – about $4 million over 2019-20 – helped by the return of the BNP Paribas earlier this month at the Indian Wells Tennis Garden. The adopted budget also includes $16.8 million in operating expenses.
The tournament is due back in March, as are other major Coachella Valley events, including the Coachella and Stagecoach music festivals, which also help fill the rooms of the city’s resorts and hotels. In December, the Indian Wells La Quinta Ironman 70.3, which brings thousands of participating athletes and their families and friends to the area, returns for the first time since 2019, also bringing TOT and sales tax revenues.
Tourism is the top revenue earner for the city, making up about 65% of the city’s general fund income, and when Gov. Gavin Newsom shuttered resorts and hotels statewide and limited restaurants to takeout or delivery for several months to help slow the spread of the coronavirus, it meant about $9.7 million in lost revenue for the city.
The BNP made up for about $5 million of that loss, including an estimated $3.3 million in admission tax from ticket sales. The golf resort lost about $1.5 million in revenue with closure of the two courses and to-go only service from the Vue Grille & Bar.
The past year “required extraordinary efforts from all of us to limit the pandemic sweep. As a result, our day-to-day economic activity has been severely impacted and … so has the city’s budget, which relies heavily on tourism dollars,” Balocco said.
“We’ve had to do more with less and the willingness of our community and city workforce to meet these challenges head-on and resiliency that will be critical for the foreseeable future,” Balocco said.
Throughout the pandemic, the city has maintained a fully funded pension liability, which has been a longtime goal of the council that saves the taxpayers money and support the employees of Indian Wells,
Law enforcement services, provided under contract by the Riverside County Sheriff’s Department, makes up about 25% of the city’s expenditures. Police costs for this fiscal year are estimated to cost the city $4.6 million and go up about 2.7% in 2022-23, to $4.75 million, Balocco said.
“Indian Wells enjoys one of the lowest crime rates and quickest response times in the valley,” he said.
The city made no funding cuts to public safety during the pandemic, Councilmember Greg Sanders said in a video presentation he narrated.
Soon, the sheriff’s department will be installing license plate cameras in the city, and throughout much of the county, ‘in an effort to deter crime and catch criminals,” Sanders said.
“We have also invested in education efforts, including public service announcements to educate our community how to be proactive in preventing becoming a victim of a crime,” Sanders said.
Staff also continue to undergo emergency preparedness training to ensure they are ready for any emergency, he said.
The pandemic served as a reminder to the city that it needs to create economic opportunities that are not reliant on the tourism industry, Mayor Pro Tem Dana Reed said.
So, an economic development division has been created within City Hall to explore new opportunities, he said.
“The division serves as a resource to support local businesses and grow developments in our community with collaboration with the Indian Wells Chamber of Commerce, the Greater Coachella Valley Chamber of Commerce, Visit Greater Palm Springs, the Coachella Valley Economic Partnership and others,” Reed said.
“Even with the financial hardships brought on last year, economic development opportunities carried on and the city will continue to pinpoint new opportunities and propel our community forward for the betterment of the residents and visitors alike,” Reed said.
“As an example, the real estate industry has had a stellar year in Indian Wells, with total sales in the hundreds of millions of dollars so far,” Reed said.
In June 2020, the city contracted with Kosmont Companies to conduct an enhanced infrastructure financing district feasibility study aimed at evaluating existing vacant land and future development opportunities’ potential to partially self-fund large scale infrastructure improvements and help drive business and development in the remaining undeveloped areas of the city.
Over the past year, the city also welcomed a new farmers market at the Village shopping center, and finalizing an agreement with Lennar to build 118 new single-family homes at the corner of Cook Street and Highway 111, Reed said.
“Creative solutions like these and long-term planning are keys to economic development throughout the city,” Reed.
The Indian Wells Golf Resort
The Indian Wells Golf Resort has a new manager brought in by Troon, Sven Wiedenhaupt, who has made improvements to the two golf courses and added some new items to the Vue’s menu.
A sidewalk improvement project is set to begin in the spring to make the safer and more accessible, Councilmember Donna Griffith said.
The golf courses and Vue are flanked by the Hyatt Indian Wells and Renaissance Esmeralda resort hotels.
The Hyatt recently completed more than $1 million in landscaping improvements on top of the $21 million in improvements done last year which included the addition of water park with lazy river, Councilmember Kim Muzik said.
The Renaissance has also undergone more than $20 million of top to bottom improvements that includes room remodels and the addition of an outdoor event area for weddings and other celebrations, she said.
The Miramonte is also under a new ownership and is undergoing a renovation that will include fully updated rooms, new dining area and more, Muzik said.
‘The true foundation of the city’
While the topics covered on Wednesday were important, Balocco said the true foundation of the city was built by its residents and stands as a reminder of why the Indian Wells community is so strong.
“Our city council and staff worked hard during the pandemic with unknown consequences to maintain the quality of life in front of us,” Balocco said.
“Community members remained in high spirits in the toughest of times and made the health and safety of our neighborhoods a top priority,” he said. “The foundation of our city may have been shaken, but it was never brought down.”
Desert Sun reporter Sherry Barkas covers the cities of La Quinta, Indian Wells, Rancho Mirage and Palm Desert. She can be reached at [email protected] Follow her on Twitter @TDSsherryBarkas
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