Last updated August 7, 2018
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.
Is the City of Palos Verdes Estates in a fiscally healthy position?
Question added 08/08/2018
The City of Palos Verdes Estates is in a healthy fiscal position for maintaining the current level of services that residents expect and appreciate from the City. The voters’ approval of Measure E restored approximately $5 million (25%) to the City’s budget, so total operating income (revenue) exceeds expenses (expenditures). The General Fund budget provides, with no further enhancements:
- That the existing level of City services are being maintained;
- The emergency 50% operating reserve is being sustained;
- Some of the unobligated General Fund “Fund Balance” (excess revenue not included in the operating reserve) is being set aside for infrastructure improvements (transferred to the Capital Improvement Fund); and
- The Fund Balance for the General Fund (which provides day-to-day public services) has increased.
In fiscal years 2016-17 and 2017-18, the City’s General Fund was in a negative position due most significantly and primarily to a Fund transfer of approximately $1 million for infrastructure improvements and the temporary loss of the historical income from parcel tax revenue, respectively.
Like other cities, the City budgets, operates and accounts for revenues and expenditures on a “Fund Financial Statements” basis. The City has multiple Funds wherein each Fund is individually managed and controlled. Each Fund is a discrete entity comprised of revenue and expenditures for a specific purpose. The General Fund is for all of the City’s day-to-day operations and services. The General Fund receives tax revenue, permit fees, charges for services, etc., to provide public safety, planning, maintenance, etc. The Fund Financial Statements is a presentation of each individual Fund and is presented on a “modified accrual accounting basis.”
The City’s Comprehensive Annual Financial Report (CAFR) represents the independent, external auditor’s review of the City’s financial accounting practices and figures. The CAFR includes a presentation on a “Government Wide Financial Statements” basis that are comprised of the “Statement of Net Position” and the “Statement of Activities.” These are based on a “full accrual accounting basis” and as such, they can be misunderstood. The Statement of Activities presents citywide revenue and expenses in one statement, and includes our annual depreciation expense and the annual accrued pension expense, which are the most significant figures. Multiple years of “Net Position” are provided in the CAFR to illustrate the “Change in Net Position.” A recent Finance Advisory Committee presentation in July 2018 illustrates the presentation of the Government Wide Financial Statement.
The aforementioned “Statement of Net Position” includes current and long-term assets and liabilities. In contrast, the “Fund Financial Statements” only includes current assets and liabilities.
For most cities, the comparison of Net Position over multiple years will illustrate a decreasing Change in Net Position. This is commonplace because few cities receive income every year that is equal-to or greater-than the following three significant expenses:
1. Annual depreciation expense;
2. Annual change in pension liability; and
3. Budgeted capital expenditures.
For example, Palos Verdes Estates banked approximately $1.5 million each year from 2003/04 to 2012/13 from monies collected from a Sewer User Fee (tax) approved by voters. Funds remaining in the Sewer Fund continue to be spent even though there is no incoming revenue to offset the cost. Thus, the Fund Balance in the Sewer Fund is decreasing and the negative Change in Net Position illustrates the decrease. The Change in Net Position is also not a complete presentation of the City’s fiscal health because it includes depreciation expense and the change in pension liability (annual accrued pension expense).
(1) Depreciation expense is a discretionary value; a depreciation schedule and the value of assets are arbitrary. Consider, as an example, a road or sewer depreciates over 40 years or over 60 years. Please also consider the factors involved in valuing a public asset like a road or sewer, as there is intrinsic public value in addition to the original construction cost.
(2)The changes in pension liability are a result of CalPERS investment strategy and the performance of its investments; the City has no control over the amount of the liability and due to the annual performance of the CalPERS investments, this may increase or decrease year-to-year.
The Change in Net Position has general value because it illustrates that the City’s assets (e.g., roads and sewers) are aging, as well as identifying long-term liabilities; the Change in Net Position illustrates that there is not enough income to offset the cost of improvements of aged infrastructure and long-term liabilities. On a “Fund Financial Statements basis,” this is more accurately and completely portrayed by specifically viewing the Fund Balance of the Capital Improvement Project (CIP) Fund and Sewer Fund as these Funds are decreasing over time.
As a visual of the information described here, please see:
1. “Net Position – other cities 07-31-18” that illustrates:
a. An increase in Palos Verdes Estates’ Net Position without the inclusion of depreciation;
b. The Change in Net Position of comparable cities.
2. “All Funds Revenue – Expenditures 07-31-18” that provides a comparison of revenue and expenditures of all Funds on a “Government-Wide Fund” basis.
3. “Reserve Analysis 07-31-18” showing the City’s current and historical level of operating reserves.
4. “Financial Health Diagnostic” that portrays the City in a positive position with the exception for the year without Measure E income and for funds being available for infrastructure improvements.
5. July 2018 Finance Advisory Committee presentation.
Why does SCE spend money replacing power poles rather than underground lines; could the overhead lines in parklands be undergrounded?
Question added 08/07/2018
There are a few primary factors that come into consideration as to why Edison proceeds with replacing poles instead undergrounding the facilities.
- Edison is a regulated utility and operates under Tariff Rules with the California Public Utilities Commission. Rule 20 is the tariff that governs the undergrounding of overhead lines. It lays out the criteria, requirements and the options for governing authorities, developers, or individual customers to underground existing overhead lines and who is responsible to bear the costs of that undergrounding. Edison does not typically underground lines outside of this tariff with some rare exceptions. Please view the tariff here and additional information about its purpose and how costs are allocated can be found on the CPUC’s web site, www.cpuc.ca.gov/UtilitiesIndustries.
- Installing underground facilities is typically at least two to three times as much or more expensive than installing equivalent overhead facilities or replacing existing overhead facilities. The purpose for Rule 20 is to ensure the costs are borne appropriately for the work.
- The poles, wire and equipment you see Edison replacing are due to either compliance driven maintenance work or grid resiliency work. Both of these are to ensure public safety and to improve the reliability of the electric system in the area. These jobs are engineered to upgrade the existing infrastructure in line with Edison’s inspection findings and the rate case it receives from the Public Utilities Commission. They typically carry compliance date requirements.
In a community-wide disaster that has a debilitating impact on the Palos Verdes Estates Police systems, how will our local Police Department operate?
Question added 05/15/2018
In a large-scale disaster such as an earthquake that results in the Police Department building being “red-tagged” (uninhabitable), the Police Department will activate and deploy its Mobile Command Post. The Mobile Command Post is a City-owned trailer that is specially designed and equipped to serve as a command center. It will be positioned at an appropriate location and the City will dispatch and coordinate the emergency responses from within the Mobile Command Post.
The Mobile Command Post can be moved and relocated to different locations. It has a self-contained generator with both telephones and radios for the City’s Service Officers to handle dispatch and 911 operations.
In addition, the City’s Disaster District Program (DDP) consisting of trained City volunteers will be deployed, and the City’s amateur radio team (NART) will be activated. Both programs will assist and support dispatch operations and disaster response activities as necessary.
The Palos Verdes Estates Police Department facility has a backup generator for power outages that may occur. Moreover, the City has the capability of transferring incoming calls to the Regional Communications Center (RCC) for a limited, temporary time period until local operations resume. RCC may not have the capacity to handle Palos Verdes Estates calls nor do they utilize the same computer operating system to make this a viable alternative for an extended period of time.
How does mutual aid function between the Palos Verdes Estates Police Department and specifically the Torrance and Redondo Beach Police Departments and the Sheriff Department?
Question added 05/15/2018
Through the Mobile Data Terminals (MTDs) in Palos Verdes Estates Police cars, PVE Police officers can communicate with the neighboring agencies who dispatch through the Regional Communication Center (RCC). PVE Police officers can also communicate with neighboring agencies through hand-held radios that are programmed with the other agencies’ radio frequency. Our radios are programmed with County (Sheriff), State (CHP) and local agencies’ frequencies.
When inter-agency assistance is needed, for example, a Sheriff helicopter (known as an “airship”), Sheriff SWAT team, or back-up from Torrance or Redondo Beach, the Palos Verdes Estates Watch Commander on duty will (has the authority to) directly request services from the agency. The outside agency will determine if they have the resources to respond and provide an estimated time of arrival.
However, in a local Palos Verdes Estates incident, the PVE Police will be present and responsive to the situation. Mutual aid and/or having a contract with another agency does not guarantee the other agency(ies) will be able to respond to our request or prioritize Palos Verdes Estates as the highest priority.
In support of mutual aid, Police Departments will sometimes train together. For example, two years ago the Palos Verdes Estates Police Department conducted an active school shooter training. The Torrance Police Department was invited to participate. The South Bay Platoon consisting of south bay Police agencies also conducts trainings together; this is to ensure we are coordinating on tactics and communications for possible future incidents. When the City had a K-9 unit, monthly interagency trainings were held, and from time to time motor units (officers assigned to a motorcycle) conduct trainings together. In general, much of the interagency training is conducted in settings for the exchange information.
On the other hand, it is relevant to also point out that Police Departments are unique to communities. Moreover, the type of incident for mutual aid will result in the type of interagency support. As such, the purpose of interagency training is somewhat limited. When an outside agency responds to help a community in an incident, they will either take over the situation (i.e. a SWAT team takes over a hostage situation) with the requesting agency maintaining a perimeter or, the requesting agency handles the situation and the responding agency assists with perimeter or traffic control. It is not typical for multiple Police agencies to integrate for a response to a local community incident primarily because policies for how to handle situations differ from department to department.
How are the City’s dispatch operations staffed?
Question added 05/15/2018
In the case of a disaster, every dispatch center will have issues with an overflow of calls. This is because dispatch centers are staffed to handle what is expected to be the call volume for the shift; they are not staffed to handle the worst case scenarios. In the case of a disaster and there is an overflow of calls, the dispatchers are trained to answer calls, get the necessary information, prioritize calls and move on to the next call. Depending on the time of the day, additional people may be called-in to assist dispatch.
Is the Automatic License Plate Recognition Camera (ALPR) system fully operational at all main City entrances?
Question added 05/15/2018
Was the Sheriff called for the incident at Palos Verdes High School on April 26, 2018 when the school was on “lock-down”?
Question added 05/15/2018
No. The incident was handled by the Palos Verdes Estates Police Department in cooperation with the Palos Verdes Peninsula Unified School District.
What are the City of Palos Verdes Estates pension costs and future obligations?
Question added 03/08/2018
Palos Verdes Estates and most municipalities in the State are members of the California Public Employees Retirement System (CalPERs or PERS). PERS has two classifications of members: sworn (police) and non-sworn (miscellaneous). Within their respective classifications, municipal employees are categorized as either a “Classic” or a "PEPRA" member. The City’s contract with PERS can be found here.
The City’s pension benefit for employees can be viewed here. In summary, the City and its employees share the full amount of pension cost, which is a percentage of the employee’s salary. The employee contribution to the cost has been incrementally implemented over the past 4 years as a result of negotiations with the City’s employee organizations. Employees now pay the full amount of the employee (also known as the “normal”) share of pension costs as follows;
Percent of salary paid by every City employee to PERS
(this is the full share that PERS has established for employees)
Percent of salary paid by employer (City) to PERS
Total percent of salary paid to PERS
 Each pension program is identified by a formula. The formula is used to calculate the pension. Basically, the formula is the years of service credit multiplied by the age at retirement.
In sum, the City’s contribution to PERS for 2017-18 totals $1,266,672 of which $976,000 (77%) is attributable to sworn employees. The cost is provided in the PERS reports on the City website here. Per these reports, it has been projected that the City’s cost will increase $250,000 each year over the next five-years. The PERS increase has been a subject of City Council discussion for a long time, for example June 21, 2017 (page 17). Based on a variety of PERS factors, the actual annual payment may increase or decrease from the projected figure.
The City’s $1,266,672 annual payment to PERS is comprised of two components:
The first part is the regular contribution that is based on current payroll; cities “pay as you go” for this part. For 2017-18, this is $723,038 of the City’s total $1,266,672 annual payment to PERS.
The second part, the balance of $543,634, applies to PERS’ unfunded liability. Every municipality in the State has an unfunded 20-year or 30-year liability for retirements; Palos Verdes Estates is no different in this regard. The unfunded liability is like a mortgage. The City’s unfunded liability – the “mortgage” - is $14 million for 30-years of which $10.7 million (76%) is attributable to Police Department personnel. As the City budgets for PERS within each Department, each Departmental budget accounts for the PERS cost. For example, the $7.1 million Police Department budget includes the payment to PERS for all Police Department staff. Palos Verdes Estates currently and historically pays-down (pre-pays) a portion of these unfunded liabilities, on an annual basis, to avoid interest and to achieve greater long-term savings.
Our City along with all municipalities throughout the State recognize the large, increasing cost of pensions. However, it is PERS that determines municipal payments based on many factors including actuarial reports, amortization schedule, and return on investments – plan decisions that are beyond cities’ control. On behalf of cities including ours, the League of California Cities is working with the Governor’s Office, legislators and PERS to bring these costs under control.
 The Police Department FY 2017-18 budget shows $1,262,905 in the line item entitled “retirement,” which is different than the PERS actuarial projection of $976,000 listed above. The 2017-18 budget figure overstates the amount the City projects to pay at year end. The budget is a picture in time and was built on projections and estimates in March 2017. The FY 2017-18 year-end projection is in-line with the estimates that PERS identifies in their actuarial reports. At mid-year, expenses were at 50% because the City pre-paid some of the PERS obligations to avoid interest charges. At year end, the City expects to be below the figure in the FY 2017-18 budget line item. It is recommended that people continue to refer to the PERS figure as the year-end projection noting that it is based on the estimated payroll at the time.
For background information on pensions, the following resources may be of interest:
- Stopping the Runaway Pension Train from Western City.
- Retirement Debt: What’s the problem and how does it affect you? from CalMatters.
- Retirement System Sustainability from League of California Cities
- League of California Cities Retirement System Sustainability Study and Findings
- Amicus Brief by League of California Cities
- CalPERS YouTube video explanation of unfunded liability
- CalPERS website for actuarial reports
- City Council November 28, 2017 PERS attachments
If Palos Verdes Estates (City) contracts with the Los Angeles County Sheriff’s Department for public safety, what would the cost be and what services would the Sheriff provide?
Question added 03/07/2018
To determine the cost of Sheriff services, the Sheriff must conduct a three-phase Feasibility Study that takes approximately one-year to complete. The Sheriff’s Department has not conducted a study and as such, the City has no valid or accurate cost figure. Through the three-phase Feasibility Study, the City would establish a level of service(s) consistent with its available budget. This process has never occurred. Because the three-phase Feasibility Study has not been conducted, the scope of services that would be provided by the Sheriff’s Department has not been determined.
In September 2016 and subsequently updated in connection with the Lewis-McCrary Police Operations Study in September 2017, the Sheriff provided the City with an unofficial and potentially underestimated order-of-magnitude range of cost for patrol services. This range does not represent potential City costs for two primary reasons. First, the range does not result from an accurate three-phase Feasibility Study that addresses the City’s desired level of service (pages 109-111). Second, it does not take into account City costs that would continue concurrent with Sheriff services. For example, it does not include the City’s liability for Police pensions that would remain for the life of all current and future retired employees, nor does it include the potential cost for retaining administrative support for other community policing programs such as PVE Cares, NAART, Disaster Preparedness, Neighborhood Watch, etc.
As addressed by the Lewis-McCrary Police Operations Study (pages 65-69), it is impossible to directly compare the cost of the Sheriff with the Palos Verdes Estates Police Department. Comparing the services of the Sheriff to a local Police Department dedicated exclusively to one city is akin to comparing an HMO with a PPO for healthcare. While an HMO and PPO - the Sheriff and Police Department, respectively - both provide care, the quality and effectiveness of care delivered by them is different. This can be illustrated by the following examples;
- The Sheriff’s Department has a response time of 6 to 7 minutes from the time the Deputies receive information from Dispatch. The response time from Dispatch receiving the call to having a Deputy on the scene is greater but not available.
- The Sheriff’s Department uses a regional Dispatch center.
- The Sheriff’s Department shares Detectives among contract cities.
- The Sheriff’s Department does not provide “community policing programs” tailored to the local community.
- In a disaster, the Sheriff’s Department may prioritize other service areas that they choose other than Palos Verdes Estates.
The Palos Verdes Estates Police Department, on the other hand, provides a response time of 3 minutes (from Dispatch receiving the call to being on the scene), has Dispatchers and Detectives specifically dedicated to the City, includes community policing programs within its staffing, individually covers the cost of all services, and has a team of 4 sworn Officers working at all times for incidents that may arise. The Police Chief also controls and manages his/her Department response to a disaster according to the locally determined priorities.
The HMO to PPO analogy is also paradoxical when looking at cost; the Palos Verdes Estates Police Department and the Los Angeles County Sheriff Department presentation of costs are not an “apples to apples” comparison. This is illustrated by the cost difference in how the Sherriff and Police Department account for personnel. A 40-hour per week Sheriff Deputy has an annual cost of $283,508 (page 113) whereas the average cost of a Palos Verdes Estates Police Officer is $130,000 (page 18). When you divide the City’s entire $7.1 million Police Department budget by its 25 sworn personnel (before $630,000 in budget reductions approved by the City Council are implemented), the result is $284,000 per officer which is inclusive of the community programs, maintaining current service levels and local control, and all support and overhead costs (Dispatch, Jail, etc.). To achieve cost reductions that may or may not be realized through Sheriff services, the delivery, scope of services and cost is different. To be clear, there has never been a three-phase Feasibility Study for the cost of the Sheriff’s Department. Any quoted cost figures are therefore based on early anecdotal quotes and inaccurate.
Please read the question that follows for information on cost saving measures that have been identified and are undergoing implementation within the Police Department.
What is the cost of the Palos Verdes Estates Police Department?
Question updated 03/08/2018 with the following Addendum
Approximately $680,000 in budget reductions have been identified for implementation. Once fully implemented, the annual budget will be reduced to approximately $6.5 million. Budget reductions are comprised of eliminating two Service Officer positions ($197,397), eliminating one Sergeant position ($189,621), eliminating two Police Officer positions ($68,290) offset by other position modifications, reducing the City contract with the Santa Monica Rangers ($25,000), replacing a sworn Captain with a civilian Support Manager ($51,584), offsetting pension costs with employee contributions ($100,000).
Question added 02/27/2018
The 2017-18 annual budget for the Police Department is $7,147,038; this is after the City Council made approximately $300,000 in one-time and on-going budget reductions. A copy of the budget may be viewed here.
An additional $630,000 in on-going savings has since been identified and directed to be reduced from the budget. This results in an annual operating cost of approximately $6.5 million once all the reductions are implemented. The reductions in the budget arise from an independent evaluation of the Department that was commissioned by the City Council. The reductions are discussed here (#14) and here (audio).
The City’s contribution to employee pensions, calculated by the statewide system, currently comprises $976,000 of the Police Department budget. For more information on the City's pension costs please read the 'What are the City of Palos Verdes Estates pension costs and future obligations?' question on this page.
What is the City's pension obligation to it's employees?
Question added 02/26/2018 An expanded explanation regarding pension liabilities may be viewed here.
Cities throughout the State are confronting State mandates, pension obligations, and increasing investment into infrastructure for which local funding sources are limited. In reference to pensions, the City Council and public was provided a broad overview of the pension situation on January 23, 2018 here, by the presentation of our Comprehensive Annual Financial Report by the City’s external auditor. The City’s pension obligation can be found in its CAFR beginning on page 51 here. City staff also conducted a workshop for the Council and public about pensions at a public workshop on November 28, 2017 (Staff Report). To specifically address the City’s fiscal sustainability including considering options for meeting the City’s financial obligations, the City Council established the Finance Advisory Committee (FAC). The FAC will be developing a long-range fiscal plan for the City Council’s consideration taking into account pension obligations. Additional reference information in reference to pensions will be provided to the FAC as they develop their recommendations. The community is encouraged to attend the meetings.
Question added 02/15/2018
Measure E before voters on April 10, 2018 includes a formula for calculating a parcel tax to fund the Palos Verdes Estates Police Department. The formula is $342 plus 20¢ per square foot of building improvements. The City has been asked to explain the definition of building improvements.
Plainly speaking, “building improvements" include the livable (habitable) space of a residence as determined by the County Assessor for the calculation of property taxes. For valuing the square footage of building improvements in a residential property, the County Assessor generally includes the entry, living room, kitchen, dining room, den, bathroom(s), bedroom(s) with closet(s), basement finished to same quality as the floor above, and attic finished to same quality as the floor below as the livable space in a house. Areas of a house that are typically not considered livable by the County Assessor are garages, covered porches, balconies, patios, gazebos, guest houses, pools, pool houses, storage, recreation rooms that are only accessed by going outside of the house, unfinished basements, and unfinished attics.
The methodology for calculating the Measure E parcel tax mirrors the language for the parcel tax revenues received by the City between 2001 and 2017, which similarly applied to livable space. Since it is consistent with years past, Measure E will yield a similar amount to what residents have paid historically. The easiest way for residents to determine the amount of the prospective tax is to look at their 2016 property tax bill where it says PVE Fire Tax. Alternatively, residents can look at the square footage figure that appears on the Los Angeles County Assessor’s website, and then apply the figure to the tax formula.
Building improvements is specifically defined in the enabling ordinance, Section 3 (d) and Section 4 as follows:
Section 3 (d): For the purposes of this Chapter, the term “Building Improvement” shall mean any “structure” ”erected” on the parcel of property, as those terms are defined in Chapter 17.08 of the Palos Verdes Estates Municipal Code.
Section 4: Determination of Lots and Building Improvements. The records of the City of Palos Verdes Estates shall be utilized to determine the number of lots within any parcel of property. The records of the Los Angeles County Assessor shall be used to determine the amount of building improvement located on a parcel of property, provided, however, that the records of the City of Palos Verdes Estates Building Department may be utilized as necessary should there be a discrepancy between the records of the Los Angeles County Assessor and the actual amount of building improvement on a parcel of property.
What are the rules for posting lawn signs?
Question added 02/08/2018
The City has received a number of questions about the size and placement of lawn signs.
The City respects the public’s First Amendment right to the freedom of expression. Mindful of this protection, the City of Palos Verdes Estates allows lawn signs, but requires the lawn signs on private property to be set back at a minimum of 10-feet from the curb or edge of the roadway. No signs may be posted on public property, such as parks, parklands, trees, sidewalks, parkways, street signs, and rights-of-way. The purpose of this regulation is to control litter produced by unauthorized use and distribution of signs and preserve the natural scenic character and aesthetic appearance of the City of Palos Verdes Estates. We appreciate the public’s support and adherence to these regulations.
In reference to the size and number of signs on private property, the City refers to the regulations of the Palos Verdes Homes Association (PVHA). The PVHA advises that:
- One sign may be displayed on an improved or unimproved (vacant) residential property.
- The size of the sign displayed shall not be larger than 18 inches x 30 inches. The sign frame must be a maximum of 2 inches x 2 inches.
- All signs on the exterior of commercial buildings or located anywhere on the property must be approved by the Palos Verdes Homes Association.
Please consult with the PVHA for more information; the PVHA can be called at (310) 373-6721.
The City encourages voluntary compliance and neighborhood cooperation and communication to maintain compliance with these sign regulations. If signage concerns cannot be addressed among neighbors, they can be reported to the City at (310) 378-0383; however, recognizing the City’s limited resources, the City appreciates the public’s patience and cooperation with enforcement efforts.
Southern California Edison provides the following reminder about posting signs on public utility poles.
The City Municipal Code references signage in the following places:
Is it true that the City has been operating in a deficit for 7-years?
Question added 04/2017
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?
Question added 08/04/2017
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?
Question added 08/04/2017
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 ALPR cameras were installed near Via Rosa and Palos Verdes Boulevard, and on Via Valmonte.
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.
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.
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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.