Last updated October 24, 2017
The Question & Answer Page is intended to address community questions and provide accurate information.
The Palos Verdes Library District published a helpful guide to distinguish fake news and determine news accuracy.
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Is it true that the City has been operating in a deficit for 7-years?
No. The City is not and has not been operating with a deficit. The General Fund, the source of money for City services, consistently has operating revenues that exceed operating expenditures. For verification, please see the City’s annual financial report Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds (page 20 (FY 12-13), page 22 (FY 13-14), page 22 (FY 14-15) and page 22 (FY 15-16)).
Like most cities, Palos Verdes Estates employs the “pay as you go” practice; the City slowly accumulates money over many years in order to cover the cost of projects and equipment. The City’s operating expenses have been less than its operating revenue for many years. Excess revenue is saved and banked for capital projects (street improvements, for example) and the replacement of equipment. This excess revenue is transferred from the General Fund into the Capital Improvement Fund and Equipment Replacement Fund for when it is time to spend it.
Additionally, money that was collected from a sewer tax many years ago is held in the Sewer Fund for sewer projects. As the accumulated money is spent for capital projects, equipment and sewer projects, the Fund balances naturally decrease. This is because there are not offsetting revenues equal to the cost of the improvements or equipment purchased. The result is a decrease (negative “net change”) in Fund balances (as presented in the annual financial report page 101 (FY 15-16)).
The loss of Measure D has reduced revenue to the City by about $5 million per year. The loss of revenue has required the city to use reserves and to reduce various services. The City maintains 50% of its operating costs in reserve.
How does the cost for Fire and Paramedic Services provided by Los Angeles County compare to surrounding cities?
For a comparison of the cost of fire and paramedic services, please click here.
Additional comparative information can be found here.
Palos Verdes Estates pays the Fire District the same rates among the 10 fee-for-service cities contracting with the Fire District.
Were there public meetings about the Beautify Lunada Bay landscaping project?
The proposed project was discussed at several meetings of the Parklands Committee and City Council in 2015 and 2016. For each of these meetings, public notices were sent to all property owners within 300 feet of the project. Also, descriptive notice boards were placed on Paseo Lunado, adjacent to the stormwater outfall structure and near Lunada Bay Elementary School, 20 days before each Parklands Committee meetings. Notice Boards specified indigenous/native landscaping, seating areas and a decomposed granite walking path. The LBHOA also hosted numerous meetings with the community for input on the project for the project.
Who is responsible for the on-going maintenance and water of the Beautify Lunada Bay landscaping?
The pilot project consists of native, drought-tolerant landscaping for a one-acre area on Paseo Lunado, adjacent to the stormwater outfall structure across from Lunada Bay Elementary School. The LBHOA will be responsible for maintenance for the first three-years. The three year period provides for the plantings to become fully established, thus minimizing costs associated with watering and replacement of plants. However, if replacement of plants is necessary, the City will work with the LBHOA. The three year commitment by the LBHOA is because new landscaping is being installed in an area that has only been maintained for weed control. In contrast, the Malaga Cove Homeowners Association landscaping project at Via Ramon and Via Pinale last year does not have the three-year requirement. This is because the area consisted of landscaping and an irrigation system, and the area is in the City’s maintenance contract for service; no additional cost for maintenance is required.
Will fences and “keep out” signs be put up on blufftops?
No. The existing fencing around the stormwater outlet will also remain.
Will the pilot project be monitored to ensure that it proceeds in a safe manner and the landscaping is consistent with the approved plans?
Yes. The City will be inspecting the landscaping work during and at the conclusion of the project.
Is there City liability for injuries when there are parkland landscaping improvements, such as the Beautify Lunada Bay pilot project?
The potential for a liability claim exists with all projects on City property. A claim received by the City is addressed by the City’s claim administrator who evaluates and handles it based on the specific instance. For the Beautify Lunada Bay pilot project, the City Engineer reviewed the plans for safety prior to City Council approval of the design. The City is mindful of public safety and takes safety considerations into account when approving any design of public improvements.
If the City used contractors rather than employing staff directly, would the City's pension liabilities decrease?
The City has pension liability for the length of time the employee(s) worked for the City. It would only decrease when the former City employee(s) are deceased. For example, the City paid the pensions of former in-house firefighters upon their retirement irrespective of having transition to the Los Angeles County Fire Department for fire and paramedic services.
There is a potential for reducing the City’s pension liabilities in one other case; that is, if the contract agency was to absorb the pension liability. This would be determined by contract negotiations.
In FY 2015/16, the City paid $1.2 million in pension costs.
Can the City decrease or eliminate the pensions of employees who are already vested to receive a pension?
An employee becomes vested in CalPERS (California Public Employee Retirement System) after five years (5) of employment in an agency that contracts with CalPERS. Four-hundred and fifty (450) of the four-hundred and eighty (480) of the cities in California participate in the CalPERS pension program. There are three ways for the City to decrease or eliminate its pension obligations as follows:
- Through the Court and bankruptcy proceedings, it is possible that the pension benefit for future obligations could be reduced.
- If the City terminates its contract or stops payments to CalPERS, the pension benefits for retired and current employees could potentially be reduced. Examples include the City of Loyalton (where there was a reduction of benefits by 60%) and LA Works (where there was a reduction of benefits up to 63%). As illustrated in these examples, the cost to terminate the pension plan with CalPERS is very high.
- If the existing judicial precedent known as the “California rule” is overturned by the Court. The “California Rule” provides that no employee benefit can be reduced unless there is an equal or greater offsetting benefit. The interpretation of the “California Rule” is currently under review by both the California Appellate and Supreme Courts in a few different cases. It may be several years before rulings in these cases are issued.
Are the pension liabilities of Palos Verdes Estates higher than those of other cities? How does the Palos Verdes Estates’ pension benefits compare to the pension benefits in surrounding cities?
A comparison of every local agency’s Unfunded Actuarial Liability (UAL) and Normal Costs are published online on CalPERS (California Public Employee Retirement System) Website. These numbers can be also found on page 5 of each cities’ actuarial report that can be accessed HERE. The latest annual actuarial report is as of June 30, 2016; each year, the figures will increase.
The most effective way to compare pension liabilities is to compare an agency’s unfunded liability in relation to the percentage of payroll. According to CalPERS, Palos Verdes Estates’ unfunded liability is average among all California cities. For “Classic” safety employees, the unfunded liability is $11.7 million as computed from a projected FY 2018/19 payroll of $2.7 million. (CalPERS 2016 City of Palos Verdes Estates Safety).
Four-hundred and fifty (450) of the four-hundred and eighty (480) of the cities in California participate in the CalPERS pension program. Among them, Palos Verdes Estates’ pension benefits are comparable to the other agencies. Similar to many, Palos Verdes Estates’ employees also pay into the program. Information about CalPERS can be found in their 2015-16 CAFR at https://www.calpers.ca.gov/docs/forms-publications/cafr-2016.pdf.
Does the Palos Verdes Estates Police have the same pension formula as non-Police employees working for the City?
No. The formulas for pensions, established through State statute, vary between safety and non-safety employees as well as the date upon the employee entering the CalPERS (California Public Employee Retirement System) system. “Classic” members in CalPERS entered the program before 2013. “Classic” safety employees in Palos Verdes Estates have the formula 3%@50. “Classic” non-safety employees in Palos Verdes Estates have the formula 2%@55. “PEPRA” members in CalPERS entered the program after 2013. “PEPRA” safety employees in Palos Verdes Estates have the formula of 2.7@57. “PEPRA” non-safety employees in Palos Verdes Estates have the formula of 2%@62.
For more information about pension benefits for PVE employees, please visit the HR Toolbox.
Is Palos Verdes Estates in a similar position to other cities?
Hypothetically, two agencies may have relatively similar pension liabilities in relation to payroll, however; different circumstances make it difficult to make a fair, accurate comparison between them. For example, although cities may have a similar pension liability, one with a diverse and commercial-activity based revenue sources may be in a better situation than a city reliant on one revenue source and it being based on property-taxes.
In addition, each city’s unfunded liability varies because of returns on CalPERS’(California Public Employee Retirement System) investments, when employees choose to retire, the number of retired employees, life expectancies, etc. Cities have little flexibility to mitigate these factors.
How do the pension benefits offered to new Palos Verdes Estates employees compare to those offered to new employees in surrounding cities?
In many cities, including Palos Verdes Estates, all new employees hired after January 1, 2013 who have never been employed by a City or have been unemployed from a City for over six (6) months are considered “PEPRA” members. “PEPRA” safety and non-safety employees in all California cities participating in the CalPERS (California Public Employee Retirement System) program have the same pension. For more information about PEPRA, please visit https://www.calpers.ca.gov/page/about/laws-regulations/regulatory-actions/pepra.
What's the traffic project that is going to impact Palos Verdes Drive West?
Southern California Edison (SCE) is planning to upgrade its underground systems, which includes infrastructure below Palos Verdes Drive West.
Palos Verdes Drive West will closed to through traffic between Via Almar/Corta and Paseo Del Mar due to SCE’s work which will be occurring at select locations between 533 and 641 Palos Verdes Drive West. Residents, guests and mail will have access at all times in this area from the north. Between the hours of 5 p.m. and 9 a.m., access will also be available from the south.
The 24-hour southbound closure will occur for about two weeks, with full daytime only closures the remainder of the time.
Residents should be receiving this notice in the mail from SCE, which includes detour information. In addition, residents may contact the Project/Construction Manager who will deal with onsite issues. The Project/Construction Manager is Michael Lopez and his phone number is (909) 615-9672.
Staff will monitor this project closely and, to the extent possible, support the project to minimize impacts to the public.
Is PVEPD using the Automated License Plate Reader (ALPR) system right now?
Yes. The Police Department has established protocols, trained its personnel, and is currently utilizing data/active alerts from other ALPRs cameras, including the ones on the Peninsula, Torrance and several other cities in LA County. Dispatch receives live alerts and the PVEPD Detective Bureau uses ALPR data as a very successful investigative tool. This ALPR data has proven beneficial in investigating crimes, recovering stolen vehicles and aided in making arrests. There have been two vehicles that were stolen from PVE that the PVEPD Detective Bureau recovered within 24 hours by using the ALPR data.
Does the City of Palos Verdes Estates have an ALPR system and what is the status of obtaining it?
Yes. The City of Palos Verdes Estates joined with the Cities of Rancho Palos Verdes, Rolling Hills Estates and Rolling Hills in a multi-city agreement for implementation of Automated License Plate Readers (ALPR) at gateway locations around the Peninsula. Two locations are scheduled for ALPR cameras in PVE. They will be installed near Via Rosa and Palos Verdes Boulevard, and on Via Valmonte.
What process is underway to get the ALPR cameras installed?
Unlike Rancho Palos Verdes and Rolling Hills Estates, Palos Verdes Estates does not have:
- existing traffic signal, street lighting or other adequate camera supports
- readily available electrical service points along roadways
Both are necessary to install the equipment. The other two cities utilized their existing infrastructure to place equipment on; Palos Verdes Estates must retain contractors to install the necessary infrastructure.
Since the City did not receive any bids, the City reached out to potential contractors and was quoted $100,000 to install the infrastructure. The City is now proceeding with constructing and bidding incremental components to install the system at a lower cost.
What is the City doing to fully bring on the ALPR system?
At this time, the City is working directly with Southern California Edison and underground contractors/electricians to establish electric service and construct poles/foundations at the locations where the ALPR cameras will be installed. The project is being pursued incrementally.
The installations are projected to be completed no later than the end of year.
Why are the flags at the PV Drive West/ PV Drive North Triangle not lit at nighttime?
The Flag Code at 4 U.S.C. section 6(a) states: “It is the universal custom to display the flag only from sunrise to sunset on buildings and on stationary flagstaffs in the open. However, when a patriotic effect is desired, the flag may be displayed 24 hours a day if properly illuminated during the hours of darkness.”
That is, it is not mandatory, only customary, not to fly the flag at night. Neither the Code nor interpretative case law explains what is meant by “properly illuminated.”
The City believes that the purpose of this custom is to make sure that the flag is not neglected, and that proper respect is shown. The issue becomes, what is our intent in flying the flags at night?
The City started flying the flags in the Malaga Cove Triangle after the September 11, 2001 attacks. The City flies two groups of flags: 9 flags in one group, 11 flags in the other group. The flags are maintained and replaced periodically when they become frayed.
The City now has the “custom” of flying these flags constantly. They are flown in honor of the many Americans who died that day, including the first responders, the young men and women in the Armed Forces halfway around the world fighting in wars, and as a promise for the future.
At one point, the flags were removed due to flag etiquette concerns, and because of the resulting outcry, they were restored. And, at a well-attended community meeting in 2011, when the public was asked whether the City should take the flags down or continue to fly them (with arguably inadequate lighting), the response was strong, emotional, and appeared unanimous to keep flying the flags.
So, the City continues to fly the flags as they are, and the City intends no disrespect to the flag. It is the contrary.
The City was scheduled to commence a project that would have included landscaping improvements to the triangle median and illumination of the flags. Due to the City’s financial situation, that project has been put on hold until more funding is available.
Why are the fountains turned off?
As a result of Measure D failing at the polls in March 2017, the City faced a $5 million shortfall for funding City operations. Since April 2017, many community meetings were held that focused on this financial situation and how to address the 25% loss of revenue. With adoption of the budget in June 2017, four strategies were implemented to temporarily solve this problem:
- Budget cuts
- Defunding some capital projects
- Repurposing funds that had been set aside for the replacement of equipment
- Using reserves
As one of the citywide budget cuts, the City Council temporarily eliminated the contract and maintenance services of all City fountains; this reduction saves the City approximately $20,000 for the year. Additionally, several of the City’s fountains are in need of capital outlay to rehabilitate repair pumps, piping, basins and other features. The City does not have funding in the budget for the necessary repairs.
However, the budget situation identifies an opportunity for residents to support City projects and services, at least potentially until a new substantial revenue source can be established. Residents may be interested in contributing to the City for replacing the pump and the cost of operation and maintenance. If you have specific questions about contributing, please call (310) 378-0383.
For more information, please visit http://www.pvestates.org/government/finance/fy-2017-18-budget-shortfall.
The City Manager is the second highest paid City Manager in the state, the highest paid City Manager per capita, and has a $250,000 salary per year.
According to Transparent CA and CA State Controller’s Government Compensation in California, the highest and second highest paid City Manager is an employee of the City of Escondido and San Jose, respectively. The highest paid City Manager per capita is an employee of the City of Vernon. According to the League of California Cities, there are 482 cities in California.
Per the employment agreement with the City, the 2016 annual salary is $213,180.
Will the City will eliminate its Police Department and contract with the Los Angeles County’s Sheriff Department for law enforcement services?
The City is committed to maintaining essential public safety services and specifically the Police Department, and while many residents express support for the City’s Police Department, many difficult choices will be necessary for determining the mix of budget reductions, reserves and other funding for balancing the budget. Everything will be on the table for consideration; when the City is facing a 36% reduction in operating costs and position vacancies cannot be filled, no individual department can be spared an impact. The City Council will be provided with options for utilizing fiscal reserves, funds appropriated for capital improvement projects, and funds designated for equipment replacement combined with decision packages consisting of costs and service level reductions for balancing the budget.
The City Council will resume their discussion on balancing the FY 2017/18 budget at the June 13th City Council meeting. To receive notification of when the meeting agenda and staff report are posted, sign up at http://www.pvestates.org/how-do-i/sign-up-for-e-notifications.
Will the Butcher Hill project block/close Via Valmonte?
The City is not aware of any plans or proposals associated with this or any project that would involve closing or blocking Via Valmonte. Specifically, the developer’s traffic report mentions nothing about this. To view information such as the project plan and other studies, please visit the project's page on the Torrance City website. For updates, please visit the Neighboring Projects of Interest page.
Why doesn’t the City post and make available on line: contracts, agreements, invoices, reports, ordinances, guidelines, and grant submissions and results?
The City is working toward having existing documents available on-line in a searchable data base through a public portal. As time and funding permits for scanning or converting documents, and identifying and organizing them into a user-friendly and searchable format, the City is and will be posting information. The City’s website is continually being updated with information. The Open Government Portal is the current location for many documents. Others can be found on the City website on the Department page(s). The City uses Questys for creating the public portal and direct access to documents.
Ordinances constitute the Municipal Code that can be accessed here.
Public records are available are also available by request. For more information, click here.
Please explain the Parklands MOU.
Please click here to review the MOU (agreement) pertaining to the parklands on Via Panorama and the associated court filings.
The City spends a significant amount on employee overtime.
When staff, primarily police officers and dispatchers are on leave, whether it is for vacation, training, disability, or medical, overtime is necessary to back-fill the vacancy and provide public safety, officer safety and sustain operations. Over the past three years, there have been many personnel on leave resulting in significant overtime. In addition, extra work for planned or unplanned events also results in overtime. A few include the Police Department’s response to the spike in burglaries (2015), Lunada Bay surfing (2016), and bicyclists (2016). Officers working the overtime burglary detail were responsible for catching the burglary crew and ending the burglary spree.
What meetings were held with City staff regarding bicycling in the City and has the City taken into consideration all the costs and obligations associated with bicycle routes?
The City has no plan or scheduled discussion at this time for creating bicycle routes through the City. However, bicyclists’ and drivers’ shared use of the roadways and compliance with the California Vehicle Code are important to the City for public safety. To address public safety, City representatives have met with cycling groups and resident groups. City officials have also talked individually with residents and cyclists. As City officials routinely communicate with members of the public on municipal matters, meetings and conversations with groups and individuals will continue with parties interested in bicycling and roadway safety. Policy matters and recommendations, roadway changes, and the costs and obligations associated with bicycle routes will be subject to discussion by the Traffic Safety Committee and City Council.
To receive notification of City Council meeting agendas, please sign up for e-notifications
How are topics for City Council agendas determined?
Council meetings are the business meetings of the City. Council agendas are composed of items that are pertinent to fulling the operational goals and priorities, the action items to implement the policies and budget of the Council. Staff prepares the agenda based on actions necessary for the continuity of business. For timing and placement of agenda items, the agendas are prepared in consultation with the Mayor, and Mayor Pro Tem as available. Council Members may also place items on the agenda. Please see Council Operating Guidelines (#2) for an overview of the Council member’s role in the process of setting agendas. The process herein represent generally accepted practices; in cities, staff develops a proposed agenda and works with elected officials to finalize it.
Does the City identify and achieve cost savings and efficiencies?
Mindful of the City’s limited resources and increased public demand for service, city staff continually evaluates practices and processes for efficiencies and cost savings. The City has achieved savings and efficiencies through bidding, use of technology, website upgrades, cooperative agreements with other agencies, contracting services, use of volunteers, etc. We welcome additional input from the public to improve services and reduce costs where appropriate.
Why doesn’t the City bid its legal services rather than have an exclusive agreement for legal services.
Most California cities retain legal services of legal firms that specialize in municipal government. Since 2010, through a competitive bid process, the City Council retained the firm of Jenkins & Hogin. Ms. Christi Hogin was named as the City Attorney (an appointed, non-elected position) to serve Palos Verdes Estates. The City retains other legal counsel on an as-needed basis for specialty services such as labor negotiations.
How are the invoices for the City Attorney approved?
City Attorney invoices are reviewed monthly by the Mayor, Mayor Pro Tem and City Manager. When each invoice is received and the detail is provided to the Mayor and Mayor Pro Tem, this committee provides an internal review of the invoice and may ask for more detail. Once approved by the Council, all checks are processed. The City Treasurer has no role in the processing and approval of invoices. The City Treasurer is responsible for managing the investments of the City.
Is the City following any guidelines to determine cell tower locations?
To have a better understanding of how the City can play a role in regulating cell tower locations, please see the Wireless Telecommunication Facilities FAQ.
State and Federal laws, and a variety of Court rulings prescribe and limit all cities’ ability to influence the locations for cell sites. In fact, cities can only control “time, place and manner,” and under, the Palos Verdes Estates Municipal Code (PVEMC) Chapter 18.55, the City specifically regulates the location, design, and aesthetics of wireless facilities or commercial antennas. An enhanced regulation is currently before the Planning Commission for discussion and more information can be found on the Planning & Building Department’s page.
Can the City can receive a greater share of the 1% of property taxes paid by property owners?
To change the apportionment of property taxes received by a City like Palos Verdes Estates, statewide legislation to reallocate tax revenue among all cities throughout the state would be necessary.
The approval of Proposition 13 in 1978 established that property taxes are limited to 1% of the property value assessed at the time of purchase. After voters approved Proposition 13, the apportionment of property tax revenue was set by Assembly Bill 8 (AB 8). The process of property tax collection and allocation is based on State statutes that apply to all counties and all cities in the State.
Because of the limitation of property tax established by Proposition 13, if the City received a greater percentage of the 1% paid in property taxes, it would mean that another public agency or agencies would receive less funding. The establishment of a 1% maximum property tax rate by Proposition 13 created a property tax revenue “pie” from which all public agencies share. A greater portion of this property tax pie going to the City or to another public agency necessarily reduces the share of other public agencies. Changing the allocation of the 1% distribution will require repeal or change of AB 8 approved by the Legislature and Governor.
Changes to a public agency’s share of property tax revenue only occurs when a public agency takes over the provision of services from another public agency. An example would be if a city were to take over the Library District. The city’s share of the 1% in property taxes would be increased by the apportionment previously allocated to the Library as compensation for the provision of those services.
On April 6, 2017, the City sent a letter to Supervisor Janice Hahn requesting that Los Angeles County consider increasing the City's share of property tax or to include the City in the Fire Suppression Benefit Assessment District without charge to the City. The County's response can be read here.
As a result of these limitations on growth in assessed value and fixing the City’s share of the 1% tax rate, property tax revenues are seldom able to keep pace with increases in operational expenses. Unless there is a great deal of new development or annexation of additional territories, growth in property taxes, even over long periods, will not be able to fill a $4.8 million hole in the budget. Based on the 1% tax rate under Prop 13 and the City’s 11.3% share of that tax rate, the addition of $10 million in new or added value will add $11,300 in revenue to the City’s general fund. In order to add $4.8 million in new revenue that would replace the special tax, an additional $4.25 billion in value would have to be added.
Given that homes in the City turn over at about the same rate, there is no way to estimate how many homes that have not been sold for many years and how many homes that have been purchased fairly recently will sell in a particular year.
Generally, value is added to a property when square footage is added. The remodeling of a kitchen or bathroom doesn’t typically cause the Assessor to add assessed value to a property even if the remodel costs many thousands of dollars. These remodels are considered as added improvements. Replacing wood fences with block walls, adding a swimming pool or enclosed patios would cause an increase in valuation.
The FY14/15-15/16 Building Activity Report provides additional information on how much the City received for building permits and development on average. Fees for improvements and changes to existing homes and recently sold homes are incorporated into the General Fund (Page 17, FY16-18 Budget).
Over the past 15 years, assessed values in the City have increased by 100.6%. The growth per year varied, however, on average, growth has been approximately 6.7% per year. The growth in assessed value takes into account values added by the annual inflation adjustment (2%); new construction, transfers of ownership and all other forms of improvements. In order to generate $4.8 million in revenue to the City, an additional $4.2 billion in assessed value would be needed. Based on the current assessed value of $6.75 billion and a growth rate of 6.7% per year, it would take approximately 7 or 8 years to achieve the valuation necessary to generate tax revenue sufficient to fund another $4.8 million in operating costs.
This time projection is absent increases to Fire and Paramedic contract cost increases averaging 3% a year, and other concurrent cost increases that regularly are necessary for maintaining City operations and services. The cost of City services for fuel, equipment, technology, facility repairs, capital projects, contract services, State mandates, salaries and benefits, and insurance regularly increase. It is unclear if or when the current revenue shortfall can be realistically covered by property tax revenues.
For more information regarding property taxes, visit the City Finances page.