“Alone we can do so little; together we can do so much”
— Helen Keller

Description:

The Capital Net Assets of PVE have declined by $16.5 million over the past 10 years; yet spending continues to increase at an unsustainable rate, especially over the past 3 years (click here). Due to Measure D not passing in the March 7 municipal election (click here), the city of PVE now faces a 25% deficit in its budget for the 2018 fiscal year. 

Although the City Council is making efforts to find ways to increase government efficiency and reduce costs, they also are discussing a new Parcel Tax for 2018 to replace the funds lost from Measure D.  But what if this potential new tax also fails to pass?

PVrrg believes that the primary reason Measure D failed was due to resident distrust of the city government’s ability to manage its finances responsibly.  Thus we strongly propose that a Citizens Finance Advisory Committee be established to support the city government in managing its budget, as well as to help restore resident trust that their tax dollars will be managed responsibly.

Chronology of Events

3/7/2017 -- Measure D failed to pass; City lost 25% of its budgeted income; residents overwhelmingly voted for all new candidates for City Council and City Treasurer (click here).

May 2017 -- PVrrg analysis of Published City Financial Statements indicated that PVE Net Position reduced by $14.5 million since 2007 and yet costs continue to increase (click here)

4/25/2017 -- CC decided to look for cost savings and redo fiscal 2016/2017 budget with reduced income, formed 3 Ad Hoc committees, and instructed City Manager to try to come up ways to cut expenses (click here)

5/10/2017 -- At Citizen’s Academy budget/engagement meeting at PV Golf Club City Manager, Tony Dahlerbruch, said more Parcel Taxes would be needed even if the replacement of Measure D were passed

5/23/2017 -- City hires political consultant Larry Tramutola for $7,500 to help ensure a 2nd Parcel Tax will pass (click here)

6/13/2017 -- City hires police consultant Mike McCrary for $35,000 for a management and service study of PVEPD (click here)

6/21/2017 -- City passed new budget for FY2016/2017 using $1.5M from reserve (click here)

7/11/2017 -- Consultant Larry Tramutola advised having a Parcel Tax Fiscal Advisory Committee to oversee the spending and ensure a new parcel tax would pass (click here)

11/14/17  -- City Council discusses implementing a Citizen's Financial Advisory Committee (click here)

Voting Record of Elected Officials:

The City Council has yet to vote on this recommendation, but Council Member Sanford Davidson has stated his support in council meetings in April 2017 and again in June 13, 2017.

PVRRG Perspective:

PVE is currently experiencing a financial deficit not just because Measure D failed, but in part because of past unchecked spending and an absence of planning for the long-term financial well being of the city.  City Council and the staff have begun to address this deficit by finding areas within the 2017 budget that can be cut, potential changes in the PVE Police Department and also by studying for future consideration of a new parcel tax.  We applaud these efforts to put our city’s financial house in order. 

However, financial health is not just about balancing the budgets from year to year.  Rather it should be about sound fiscal management over the long-term including preparation of a 5-year financial plan.  City staff should be engaged in these long-term planning activities, but we’ve also heard that the staffs have completely full plates and have not had the time to accomplish this future oriented work.

Currently the Council consists of three attorneys, one physician and one real estate person.  As such, the City Council members have other professional responsibilities and/or family responsibilities that appropriately limit the time they have to spend on these matters.  In addition, their professional expertise may not fully encompass complex financial matters.

Furthermore, when new council member are elected in the future, they don’t necessarily come with the knowledge and experiences needed to perform the job of financial oversight.  A Citizens Financial Advisory Committee will ensure that the City will continuously have the necessary free, independent, and qualified financial advice it needs. 

The reason for having a Citizen’s Financial Advisory Committee is to have the benefit of independent financial professionals who volunteer their expertise and time to objectively study city finances in order to:

1.     Give expert budgetary advice to the City Council.

2.     Provide independent review of city expenses.

3.     Support and review long-term financial planning.

4.     Add to the level of transparency to help restore trust in our city government.

5.     Help to decide if a new parcel tax is needed and to help drafting it to meet the necessary financial criteria. 

6.     Perform the works of the Parcel Tax Fiscal Oversight Committee as proposed by the parcel tax consultant, Larry Tramutola, if we should have the need to do so. 

7.     Show another visible reform that will improve the prospects of a new parcel tax passing.

8.     Provide opportunity for community participation in policy-making.

9.     Prevent other financial crisis in the future.

10.   Strengthen and enhance the City Council’s independent access to essential skills needed to address our city’s important financial matters in a way that stresses transparency, accountability, engagement and competency.     

Furthermore, we believe this Committee’s members should be residents with professional financial backgrounds and be chaired by the City Treasurer. To ensure that the Committee functions unhindered by politics, personal allegiance, or conflict of interest, we also recommend that the City Treasurer, as chair of the committee, interview the potential members and then make recommendations to the Council for their appointments.

Is there any downside? 

We did hear from Council Member Jennifer King the concern that it’s the Council’s job to conduct financial review and approve budgets.  We agree.  However, we believe it would definitely be to their benefit to receive independent advice, which doesn’t in any way take away from the counsel’s prerogatives or responsibility under representative government.

We also agree with Council Member Davidson’s question, “What harm can there be by having the advice of such a committee?”  For example, the Council still would have the final say on the budget as well as the option of not taking the advice of the committee.

Please click here for information and functions of Citizens Financial Advisory Committees on other cities who already have them.

We urge you to take some time to write to all the Council members asking that they vote in favor of the formation of a new Citizen’s Financial Advisory Committee to help the Council solve our city’s current fiscal problems and guide it into future financial stability as well as transparency, accountability, engagement, and competence.  PVrrg members are convinced that this would be a win-win situation for our beloved City of Palos Verdes Estates.

If you agree with us, please write/email to the PVE City Council Members and City Treasurer as follows:

To save you time, we have prepared the following letter that you can use to send to the Council members:

_______________________________________________________

Dear PVE City Council members,

Thank you for listening to us and for considering the formation of a Citizen’s Financial Advisory Committee.

I agree with its formation as proposed by PVrrg (PV Residents for Responsible Government) to help bring our city back to fiscal health. 

I am writing to ask you to please vote for its establishment. 

Sincerely,
Your name
Home address

_______________________________________________________

Thank you for taking the time to read this and to write to our City Council members.

We welcome your questions and comments. Please feel free to write to us at info@pvrrg.org. 

Comments from the Public:

“The quality of your graphics is awesome. It is clear that something has happened in the last three years as the trend is WAY up and it is pretty clear this is not sustainable.”
— Jim Nyman

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