The Financial Reality

Measure E’s expiration is not the only issue. It is part of a larger financial challenge facing Palos Verdes Estates.

The City faces:

• Structural operating deficits
• Rising public safety costs
• Pension obligations that fluctuate with CalPERS investment performance
• Approximately $80 million in unfunded infrastructure projects over the next ten years
• Depleted reserves
• Limited commercial tax revenue

Pensions Are Important — But Volatile

Pension liabilities can fluctuate significantly based on CalPERS investment performance, actuarial assumptions, payroll growth, discount rates, and other factors.

Because of that volatility, pension paydown cannot be reasonably managed through a rigid fixed annual parcel tax allocation.

A fixed set-aside of $X million per year may sound responsible, but it does not necessarily match the actual liability, which can change materially from year to year primarily based on CalPers investment performance.

Infrastructure Needs Are Significant — and Growing

The City has identified approximately $80 million in unfunded infrastructure needs over the next ten years.

That estimate does not fully account for:

• Inflation
• Unknown future repairs
• New projects not yet identified
• Emergency repairs
• Cost escalation in public works construction

A smaller parcel tax that attempts to divide funding between police and infrastructure risks doing neither adequately.

The Need for Flexibility

Pensions and infrastructure are real obligations, but they are not static. They require ongoing planning, annual review, and flexibility.

Public safety, by contrast, is a recurring and predictable core obligation. Police, fire, paramedic, and emergency services must be funded every year.

That is why Measure PF ties the parcel tax to public safety first.