“A nation of sheep will beget a government of wolves.”
Overall Financial Health of the City
Over the last twenty-two fiscal years (2003-2024) PVE has experienced economic and demographic trends that have negatively impacted the City’s financial picture (on our website we will have a link here for a more detailed analysis). The important financial trends to be considered include the following:
Revenues -
PVE has limited and fixed sources of revenue (primarily property & other taxes including Measure E and parcel tax revenues, concessions fees and other fees/permits/fines, and revenue from federal, state and county sources)
PVE enjoys only modest investment income on its reserves
Expenses (current actual and future potential) -
Increasing “safety” costs to run the city including police & fire, fire/flood/earthquake mitigation, street & road maintenance, and ensuring reliability of Utilities and other Critical services
Debt service, primarily CalPERS for pension liabilities which have increased
Expenses related to maintaining “qualify of life” in our city (for example upkeep and maintenance of open space & parklands, beautification & improvements, view preservation, critter control, and other city services
Other unmet challenges such as increasing inflation, eroding infrastructure and pension debt unpredictability
In a nutshell, cash security is the City’s overarching financial priority. The latest version of the Long -Term Financial Forecast from FY2023-24 through FY2032-33, (https://pvestates.granicus.com/MetaViewer.php?view_id=&event_id=1126&meta_id=93305)
shows our forecasted revenues falling short of projected by $9.38M, when Measure E expires at FY 27-28.
Questions for city COuncil Candidates on Relevant Issues:
1: Regarding Important PVE issues:
Background: PVE government is experiencing numerous important issues.
Question:
In your opinion, what are the top three issues facing the city in order of priority?
On a scale of 1 – 10, with 10 being the best, how would you rate the city’s performance in dealing with each of those issues?
As a member of the City Council, what would you do to increase your rating by at least 1 level? (i.e.,actions you would take to move a “4” to a “5”, etc.)
For responses by the three candidates, click here.
2. Regarding Pension Debt:
Background: In the FY 23 financial report, pension liabilities were projected to exceed $20M with annual payments of approximately $2M.
Question: How would you guide the City Council in managing this current liability and controlling it going forward?
For responses by the three candidates, click here.
3. Regarding Capital Improvements:
Background: PVE appears to have persistently underfunded capital improvement reserves, notwithstanding that there are ongoing challenges managing sewers, streets, water intrusion, City Hall seismic and communication technology deficits, and other infrastructure needs.
Question: Alongside its recurring operational expenses, how should the City fund these medium and long-term capital improvement needs?
For responses by the three candidates, click here.
4. Regarding Measure E Expiration:
Background: Measure E, a $5 million parcel tax containing no annual escalation factor, was passed in November 2018, specifically designated to fund (albeit partially) the Palos Verdes Police Department.
The PVE Finance Advisory Committee (FAC) recently forecasted that the City will face annual structural operating deficits beginning in FY 24-25, increasing $8.6 million annually after Measure E sunsets at the end of FY 26-27, and the deficits will continue to increase in subsequent years.
Questions:
How would you propose to cover the City’s looming revenue shortfall?
With respect to any proposed replacement for the current Measure E, would you support replacement with a new identical parcel tax (same parcel tax level, no escalator), replacement with a new parcel tax to more fully cover the anticipated future cost of the city (new parcel tax level with or without an annual escalator), and/or reduce city services?
If a new tax needs to be drafted, what do you think the City should do to inform and include the residents in the decision- making process in order to draft the right tax to ensure PVE’s future financial well-being?
For responses by the three candidates, click here.
5. Regarding Staffing Challenges
Background: PVE has experienced staffing challenges for the past 6 years, including numerous position vacancies and having 6 different interim and City Managers, as well as operating without a Finance Director. Staff turnover impacts service to residents, as well as loss of knowledge and sensitivity to the City’s special character.
Question: Do you have any ideas about the root causes of the City’s persistent staffing issues and how to solve them?
For responses by the three candidates, click here.
6. Regarding the Financial Advisory Committee (FAC)
Background: The FAC, consisting of 5 resident financial experts, was formed in 2018, to assist with long-range financial forecasts for the City. Since then, it has worked on numerous important financial tasks with no cost to the City. However, the FAC is not fully utilized currently, its last meeting being in January 2024. According to the City’s website: Its “members shall serve at the pleasure of the city council and may be removed by a majority of the council.” (Ord. 727 § 1, 2018)
Questions:
Do you think the FAC has served a useful role?
What do you think the role of the FAC should be going forward?
What do you think the FAC can do to help PVE better manage its finances, considering the City’s revenue challenges, operating and infrastructure needs and continued staffing issues?
For responses by the three candidates, click here.
7. Regarding Housing Elements
Background: In recent years, the State of California has declared a housing crisis in the State and passed several laws requiring cities to allow, among other things, ministerial approval of certain accessory dwelling units, single-family lot splits and fast-tracking multi-family housing with a percentage of low-income units. PVE and other cities have been required to develop multi-year Housing Element plans to facilitate the building of a state-allotted number of new and affordable residential units, including any necessary rezoning. The State has declared Covenants, Conditions and Restrictions, such as those administered by the PV Homes Association, to be null and void if they conflict with such State mandates.
Questions:
What is your position on such State housing mandates and the loss of local control over planning and zoning?
What actions do you think the City should take to comply with, oppose or change these laws? What actions do you believe would be most effective in addressing state housing mandates?
For responses by the three candidates, click here.
8. Neighborhood Compatibility:
Background: The City has adopted Neighborhood Compatibility ordinances to try to assure that new or remodeled structures are compatible with the neighborhood where they are located. Among other things, the City is required to consider impacts on privacy, neighbors ’existing views and neighborhood character in terms of size and massing of the project. In some cases, projects can be quite contentious.
Questions:
How good a job do you think the City is doing in balancing neighborhood compatibility and owner’s development rights?
Do you have any ideas for how the municipal code or neighborhood compatibility process might be improved?
For responses by the three candidates, click here.
9. Regarding New Ideas:
Background: Since at least 2016, candidates for city government have faced challenges similar to those we are facing today. They have proposed programs, conducted focus groups, created sub teams, called in and paid for consultants, engaged in frank and honest discussions, and the problems persist, largely un- ameliorated.
Question: In your opinion, what is missing? If elected, what would you do differently so that these efforts will be more successful in the future than they have been so far?
For responses by the three candidates, click here.
Questions for TREASURER Candidate on Relevant Issues:
10: Regarding the Responsibilities of the City Treasurer:
Background: Duties and Responsibilities of the PVE City Treasurer
Is defined as: (https://www.pvestates.org/government/finance/city-treasurer)
“The Palos Verdes Estates City Treasurer, as an elected official, maintains an autonomous role for oversight and decisions relating to the investment and safe keeping of City funds. The position is independent of the City Council who has the role and responsibility for City government including establishing City policies. The City Treasurer’s function is defined by California Government Code Section 41001-41007 and guided by the Palos Verdes Estates Investment Policy and other policies that are adopted by the City Council. The City Treasurer, working closely with City staff, has the specific function to (1) assure the availability of funds for meeting the City’s daily cash flow needs, (2) manage and recommend City banking and custody service agreements in conformance with City policy and best practices, (3) work with authorized investment brokers and invest responsibly for maintaining the security and accessibility of City funds, (4) prepare monthly portfolio statements and quarterly portfolio reports that present investments, results, conformance to the City’s policies and best practices and appropriate liquidity, and (5) annually review and recommend updates to the City’s Investment Policy. The City Treasurer is supported in his/her duties by an Investment Policy Advisory Committee that includes the City Treasurer, who shall serve as Chairperson, and two residents appointed by the City Council. The City Manager or designee serves on the Investment Policy Advisory Committee as an ex-officio member. The City Treasurer also is responsible for providing a signature on approved checks, drafts and warrants.”
Question:
Please summarize what you believe are the main responsibilities of the City Treasurer in PVE. What should be the priorities in this role?
For response by the one candidate, click here.
11: Regarding Your Goals and Objectives as Treasurer:
Background: Aware of the financial issues confronting PVE, some stated earlier under Overall Financial Health of the City
Question:
Why are you running for Treasurer and what do you hope you can accomplish during your term?
For response by the one candidate, click here.
12: Regarding Your Background and Experiences for Treasurer:
Question:
You have a long and impressive career spent in managing software engineering teams, not in Finance. Given that a significant part of the Treasurer's job requires technical financial skills (i.e., managing the City's cash and investing) how do you think your background and experience could help or hinder you in this role? How will you earn credibility despite your lack of financial credentials (MBA, CPA, CFA)?
For response by the one candidate, click here.