Palos Verdes Estates is facing growing financial pressures driven by:

• The scheduled expiration of Measure E in 2027, which currently contributes $5.1 million annually for local law enforcement
• Rising operational costs, including labor market competitiveness and inflation
• Aging infrastructure with substantial repair and maintenance needs

The FY 2025–26 budget was adopted after addressing a projected $5.1 million deficit through operational reductions and deferring capital projects. A remaining $1.97 million shortfall was closed using one-time reserves. With Measure E set to expire in 2027 and annual expenditures continuing to outpace revenues, the City is at a critical financial crossroads. 

Measure E is a special Law Enforcement Parcel Tax approved by PVE voters in 2018 with 69% support. It:

• Provides approximately $5.1 million per year for police services
• Is assessed at $342 per parcel, plus $0.20 per square foot of building improvements
• Is legally restricted to funding local law enforcement
• Will sunset after Fiscal Year 2026–27

Measure E has helped sustain some of the PVE Police Department's budget, but the loss of this revenue stream would leave a significant gap in public safety funding.

No. While property taxes account for about 53% of the City's General Fund revenue, Palos Verdes Estates receives only 11.3 cents of every property tax dollar due to the way funds were allocated under Proposition 13. Most of your property tax dollars go to schools, Los Angeles County, and other special districts.

In cities served by the Los Angeles County Fire District, that District receives an average of 17% of the 1% property tax. But when Proposition 13 passed in 1978, the Fire District was not collecting a designated share of property taxes in Palos Verdes Estates. Because of that, PVE was left out of the Fire District's post-Prop 13 tax structure and does not receive fire protection services through county tax funding.

Instead, the City must pay for its own fire and paramedic services—either from its limited general fund or through a voter-approved special tax.

Other cities also benefit from sales tax revenue or hotel (transient occupancy) taxes, but PVE does not have commercial centers or hotels to generate that kind of income. With limited revenue sources and rising service costs, a locally controlled and reliable funding source is essential to maintain fiscal stability and continue providing core services like fire protection and public safety.

The City has a long history of fiscal prudence and has already:

• Reduced city's workforce
• Deferred maintenance, repairs, and capital improvement projects
• Maintained reserves
• Secured one-time outside funding i.e. State, Federal, County funding/grants, ARPA

However, most cost-saving strategies have already been implemented, and remaining gaps cannot be closed without risking core services.

PVE has already stripped its budget to the bone. Additional cuts would impact city services, such as:

• Police and fire protection
• Tree Trimming and maintenance
• Wildfire prevention and storm response
• Emergency preparedness and infrastructure repair

PVE also risks losing qualified staff to neighboring cities offering more competitive pay, increasing reliance on costly contract services, and weakening institutional knowledge.

The City has and continues to evaluate a range of options, including:

• Adjusted or renewed parcel tax (potentially expanded to cover fire services)
• Utility Users Tax
• Sales Tax
• Transient Occupancy Tax
• Property related fees for sewer and storm drain maintenance
• Grants and partnerships
• Paid parking
• Large scale special events

However, other options such as hotel taxes or real estate transfer taxes are not viable due to the City's structure or lack of commercial lodging. A parcel tax remains the most practical, locally controlled option to generate meaningful revenue.

FY 2025–26 adopted budget:

• Revenues: $25.2 Million (includes $5.1 million from Measure E)
• Expenditures: $27.2 Million 
• Deficit: $1.97 million (Adopted FY 25-26 budget)

• The City Council adopted a budget for FY 25–26 that relies on reserves to close a $1.97 Million gap, highlighting the need for long-term solutions. 

If not renewed or replaced:

• The City will lose $5.1 million annually in public safety funding
• Reserves could be exhausted in less than two years
• Significant service cuts would be required, especially in police, fire, and emergency operations

Core services include:

• Police, fire, and 911 emergency response
• Infrastructure maintenance (streets, sewers, drainage)
• Wildfire prevention and weed abatement
• Neighborhood and parkland upkeep
• Public Works, emergency preparedness, and community safety programs

The City is committed to transparency and public input. Engagement efforts include:

• Community surveys
• Budget study sessions
• Town Halls and public meetings
• Regular website updates and newsletters

Residents are encouraged to:

• Visit www.pvestates.org for meeting schedules and updates
• Submit questions or suggestions by emailing Communications@PVEstates.org
• Attend Town Halls and City Council meetings