Prominent neighborhood accuses Palm Springs City Council members of conflict of interest

Editors note: Story updated 07/25/24 at 11:00 a.m. to reflect information discovered after report initially aired.

Ahead of a vote Thursday night by the Palm Springs City Council to finalize and adopt new legislation that would allow co-owned homes to operate within the City, some residents who are opposed to the proposed changes have raised additional concerns about some Council Members.

News Channel 3 has obtained a letter sent to Council on Wednesday on behalf of roughly 400 homes in the Vista Las Palmas Neighborhood, which demanded that Ron deHarte, Christy Holstege, and Lisa Middleton recuse themselves from all votes relating to the shared ownership model, or to zoning changes that would enable that model.

According to political tracking site Open Secrets, Brian Rix, a local lobbyist for Pacaso, A San Francisco-based company that currently manages five co-owned homes in Palm Springs, has made significant campaign contributions Holstege, and Middleton.

Rix gave three separate donations to Holstege of $1,000 each plus one donation of $500, for a total of $3,500. Rix also gave three donations of $1,000 plus a $250 donation to Middleton, for a total of $3,250. Rix has also donated $1,000 to Jeffrey Bernstein and $250 to Grace Garner.

City Hall's Campaign Financial Reports website shows Rix gave two $1,000 donations and a $500, totaling $1,500, to Council member Ron deHarte. deHarte, Holstege, and Middleton all voted "yes" earlier this month to move ahead to establish an ordinance that would allow co-owned homes to operate within the city for the next three years, but with some limits. Mayor Jeffrey Bernstein and Council member Grace Garner voted "no."

The letter to Council from residents in the Vista Las Palmas Neighborhood has alleged that it appears as though the refusal of the three Council Members who received campaign contributions from Rix may be a violation of California Government Code section 84308, known as the Pay to Play law.

We reached out to Palm Springs City Attorney Jeffrey Ballinger for comment on the matter. In a statement, Ballinger said that since the Council is considering an ordinance that establishes City policy going forward, not unique to Pacaso, but that applies to any company that operates co-owned homes, it is not considered a “license, permit, or other entitlement for use,” as outlined by California law. Therefore, "that new legislation does not require recusal from any Councilmembers who have received campaign contributions," according to Ballinger.

News Channel 3 also obtained a letter Thursday from the Palm Springs City Attorney to residents from the Vista Las Palmas neighborhood in response to their concerns. The letter reiterated Jeffrey Ballinger's comments about California's Pay to Play law, and stated that "Section 84308 does not apply to an ordinance such as the one proposed. Moreover, with regard to Mayor Pro Tem deHarte, he has not received a campaign contribution from Mr. Rix for well over twelve (12) months, thereby rendering Section 84308 inapplicable for that additional reason."

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