Measure E is a voter-approved parcel tax approved by Palos Verdes Estates voters in 2018.

The measure currently generates approximately $5.1 million annually and is restricted to supporting local law enforcement services provided by the Palos Verdes Estates Police Department.

Measure E is scheduled to expire in June 2027.

Measure E provides approximately $5.1 million annually that helps support the Police Department.

If Measure E expires without replacement funding, the City will lose that revenue beginning in Fiscal Year 2027–28.

The City Council is evaluating options now because the deadline to place a measure on the November 3, 2026 ballot is August 7, 2026.

The Fiscal Year 2026–27 Police Department budget is approximately $8.7 million.

Measure E currently provides approximately $5.1 million of that amount. The remainder comes from the City’s General Fund.

The Police Department provides 24-hour police protection, emergency response, investigations, traffic enforcement, school and community outreach, crime prevention programs, and other public safety services throughout the community.

The City is facing several financial pressures occurring at the same time:

• The upcoming expiration of Measure E.
• Rising public safety costs.
• Increasing fire service costs.
• Rising insurance costs.
• Growing retirement-related obligations.
• Aging infrastructure and deferred maintenance needs.
• Limited opportunities for sales tax and other revenue growth.

At the same time, expenditures have been growing faster than revenues for several years, creating a structural budget imbalance.

No single factor is responsible for the City’s financial challenges.

Palos Verdes Estates faces unique revenue limitations compared to many California cities. The City receives approximately 11.3% of the local property tax dollar, has limited sales tax revenue opportunities due to its primarily residential character, and funds fire services from its existing revenues.

At the same time, the City has experienced increasing costs associated with public safety, fire protection, infrastructure maintenance, retirement obligations, insurance, and wildfire preparedness.

While continued fiscal discipline remains important, the City’s financial challenges are the result of both increasing costs and limited revenue growth.

The City has implemented a variety of cost-saving measures over many years to help maintain essential services and address ongoing financial challenges.

• Reducing staffing levels and holding vacant positions open when possible.
• Eliminating three sworn Police Officer positions since 2018.
• Eliminating four full-time non-sworn Police Department positions, including dispatch, traffic control, and administrative support functions.
• Implementing operational reductions.
• Reducing contractual expenditures.
• Deferring maintenance and repairs.
• Deferring capital improvement projects.
• Pursuing grants and outside funding opportunities.
• Utilizing one-time funding sources where available.
• Regularly evaluating service levels and expenditures.

Despite these efforts, the adopted FY 2026-27 budget includes an approximately $1.7 million structural deficit. This marks the second consecutive year the City has relied on reserve funds to balance its budget while evaluating long-term solutions.

While these actions have helped manage short-term financial pressures, they have not eliminated the City's long-term funding challenges.

The City has relied on reserves for two consecutive years to maintain current service levels while implementing cost-saving measures and evaluating long-term solutions.

• Fiscal Year 2025–26: approximately $1.97 million in reserves.
• Fiscal Year 2026–27: approximately $1.77 million in reserves.

Together, these budgets utilize approximately $3.7 million in reserves over a two-year period.

Reserves are intended to help address temporary financial challenges and emergencies. They are not designed to fund ongoing structural deficits indefinitely.

During and following the COVID-19 pandemic, the City received one-time federal American Rescue Plan Act funding.

These funds helped offset costs and maintain services during a period of economic uncertainty.

Because ARPA funding was temporary, it could not permanently solve the City’s ongoing structural budget challenges. Without these one-time funds, the City’s financial challenges likely would have emerged sooner.

The City has identified approximately $101.7 million in long-term infrastructure needs.

These needs include streets, storm drain infrastructure, sewer infrastructure, facilities, parks, public spaces, and technology improvements.

Approximately 80% of these identified needs are currently unfunded.

Like most California cities, Palos Verdes Estates participates in the California Public Employees’ Retirement System, also known as CalPERS.

The City currently pays approximately $2 million annually toward retirement-related obligations. One option discussed by the City Council is whether future funding should include additional payments that could reduce long-term retirement costs and potentially free up resources for City services in future years.

Learn more about CalPERS and the City’s retirement-related obligations.

At the June 10, 2026 Special City Council Meeting, discussion focused on three potential funding levels:

• $8.7 million annually
• $9.7 million annually
• $10.7 million annually

The community survey asks residents to provide feedback on these options. No decision has been made regarding any future funding measure.

If Measure E expires without replacement funding, the City will lose approximately $5.1 million annually that currently supports Police Department operations.

The City Council would need to evaluate a combination of options that could include additional service reductions, expenditure reductions, reserve use, alternative revenue sources, or other budget adjustments.

No decisions regarding future service levels have been made.

The City Council has discussed potential accountability provisions, including:

• Funds remaining under local control.
• Annual public reporting.
• Specific expenditure limitations.
• Restrictions on use for new City buildings or major facility expansion projects.
• Clear identification of priorities to be funded.

The community survey seeks input on these potential safeguards.

No.

The City Council has directed staff to conduct community outreach and gather resident input. Future decisions will be made at public meetings following review of community feedback and survey results.

The City encourages all residents to participate in the community survey and stay involved throughout the process.