Palos Verdes Estates seeks to square $4 million shortfall
The City of Palos Verdes Estates is facing a budget crisis following the March defeat of a local tax extension, which is expected to result in a near $4 million shortfall in the next fiscal year’s budget.
Palos Verdes Estates’ Fire and Paramedic Services Parcel Tax, otherwise known as Measure D, was defeated at the polls despite having the approval of nearly 60 percent of voters, as it required approval from at least two-thirds of voters. Had it passed, PVE would have been authorized to extend a parcel tax, which charged a flat rate as well as percent rate based on square footage of property development, for another 12 years. With its failure, the funds from the parcel tax will dry up on July 1.
Palos Verdes Estates’ long-standing parcel tax had been on the books since the mid-1980s. The tax has funded the City’s contract with Los Angeles County Fire, which had previously regularly assisted PVE’s short-staffed fire department on calls, according to former Mayor Jim Nyman, writing for PV Residents for Responsible Government.
However, citizens (including Nyman) have begun to question the city’s spending habits, and cited the parcel tax as an enabler of government expansion run amok, and argued that no other city in Palos Verdes or California pays that particular variety of parcel tax.
The arguments against extended taxation seemed to take hold. Now, with the funding for the fire department gone, Palos Verdes Estates is left to pay $4.9 million out of its general fund to make up the difference between remaining parcel tax funds and the cost of the County services contract.
As such, according to PVE staff, general fund expenditures are projected to grow from $13.542 million in FY 2016/17 to $18.476 million in FY 2017/18.
Major cuts to services are likely in the City’s future, according to City Manager Anton Dahlerbruch.
“The City Council will be looking throughout the operating, capital improvement and equipment replacement funds to identify budget reductions to lessen the structural deficit and budget shortfall,” Dahlerbruch said in an email. “While all services and programs will be under consideration in order to achieve the savings necessary, the focus is to maintain essential and public safety services that residents desire.”
Mayor James Vandever and newly-elected Councilman Kenny Kao, with consultation from new City Treasurer Victoria Lozzi, will present their findings and recommendations on potential budget cuts at the May 9 City Council meeting.
PVE residents are also invited to voice their input in the budget process, “due to the extraordinary circumstances that exist from the loss of Measure D,” Dahlerbruch said.
Residents can learn more about participating in the process, and about the City’s finances, by visiting pvestates.org. ER