Fiscal Responsibility

By Tom Long

Maintaining the City's Financial Health and Protecting Residents' Properties

In the past four years, Mayor Tom Long and the Rancho Palos Verdes City Council have sought to keep spending low while maintaining our present level of services and protecting property values. Their success, despite being a tax-poor city, is evidenced by the steady property values and long-term residency of our residents. Under the current stewardship of the council, none of the negative influences of nearby Los Angeles have tarnished our community. Rancho Palos Verdes homes continue to be valued for the quality and beauty of the location rather than their size.

Because the City does not encourage commercial development, it maintains its pristine environment, and at a reasonable cost to the residents. Without the typical commercial sites of other cities, Rancho Palos Verdes garners very little sales tax revenue. The City's largest revenue stream comes from property taxes of about 6%. Average California cities spend approximately three times more per person than Rancho Palos Verdes, where the per person general fund revenue is only about $1 per resident per day, far less than other cities on the Hill and lower than all our neighboring South Bay Cities except sometimes Lawndale. Even with additional expenses from other funds and including all revenues such as open space grants, the city spends only about $2 per resident per day.

Additional revenue was generated when the City Council placed on the ballot and property owners passed a storm drain user fee to create a financial resource for repairing and maintaining the City's failing infrastructure. At a cost of about 10 cents per resident per day, the user fee has provided the City with an additional $1.2 million in funds that are strictly dedicated to storm drain maintenance and repair. The user fee has also reduced the significant liability risks to the City. By ensuring that catastrophic failures of outdated infrastructure were immediately corrected, the City and the residents are avoiding paying much higher costs in the form of emergency repairs, lawsuit settlements and legal fees. Prior problems caused by the failed storm drains have resulted in ongoing litigation asserting claims of over $12 million. Prior litigation was settled for over $4 million, mostly not covered by insururance. The prompt course of action encouraged by Mayor Long will certainly reduce or negate the possibility of future lawsuits of the same nature.

Some claim that the current City Council is guilty of "excessive spending," to which Mayor Long has responded, "Absolutely not. The City's problems in the past have stemmed largely from inadequate spending not excessive spending." It's the Mayor's position that in order to protect not just the financial health of the City, but also to protect residents' homes, the City must invest money to maintain infrastructure before emergency repairs become necessary. He also states unequivocally that the City needs to keep the financial reserves at a reasonable level by avoiding spending those reserves on regular expenses instead of the emergencies the money is ear-marked for.

Time and again, Mayor Long and the Council members have made wise financial choices that are in the best interest of Rancho Palos Verdes and are guided by financial professionals. The City Council and Mayor Long have invested $700,000 of City money to purchase open space in Rancho Palos Verdes; a seemingly large sum of money to spend upfront on preserving wildlife habitat and native vegetation. However, that $700,000 has already seen a return gain to the City of over $17 million in grants and donations, with the possibility of additional acquisitions and grants on the horizon as well. The promise of another income stream is in our future with the incoming Terranea resort; however Mayor Long and the Council will not rely on those funds until they've actually been collected. So far, Mayor Long has endorsed a financial course of action that preserves the nature of the community, maintains the quality of life services that Rancho Palos Verdes residents expect, while keeping the cost to each person to just about $1.10 per day. And rather than espousing empty political rhetoric, his actions in his four years as a council member have proven that his concerns relate directly to how best meet the needs of the City. He states, "My views are based on what is necessary to conserve and improve the City's quality of life and protect our property values, not a political agenda of minimizing government regardless of the consequences."