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Rancho P.V. in for Taxing Sales Job

July 19, 1987|GERALD FARIS | Times Staff Writer

When the Rancho Palos Verdes City Council recently debated whether to hold a local tax election, one resident got up and said, "I'd favor a tax if I understood the need. But up to this point, I don't understand the need."

The council subsequently decided on an election--in June, 1988--and now faces the task of convincing affluent voters suspicious of taxes that the money is needed.

"It's an uphill battle," conceded city Finance Director Kevin N. Smith, who said the message the city has to get out is that the money would be used strictly for street and road maintenance, the so-called infrastructure.

"We can document the need and show what is not getting done because there is no money for it," he said.

Public works Director George Wentz has reported that the city needs $17 million in additional money over a five-year period to keep roads from deteriorating. The new tax would be designed to bring in $3.4 million a year. The current capital improvement budget is $7.4 million, but $2 million of that is a carry-over from last year. The rest of the city's budget is $9.1 million.

Council to Choose Type of Tax

Although the election date has been set, the specific tax proposal has not. The city is likely to choose either a parcel tax or to increase the utility-users tax imposed a year ago. That will be decided by the council within two months, Smith said.

Officials say the city has to handle the tax issue as it would a political campaign, working with homeowner associations, holding community forums and using the city newsletter and the local cable television channel.

"I have people say to me, 'Cut out a section of the road and show me it's bad,' " said Councilman John McTaggart. "I will if I have to."

An election is mandated by Proposition 62, passed last November by 58% of the state's voters. It requires a majority popular vote on new or increased general taxes, including utility-users taxes. The council, after some acrimonious sessions a year ago, approved a 5% utility tax a year ago that is expected to bring in $1.6 million this year. But it will die if not approved by the electorate before November, 1988.

The utility tax goes into the capital improvements budget, which also is funded through federal, county and state road funds.

Some Roads in Bad Shape

According to the Public Works Department, some major streets, including Palos Verdes Drive South, need extensive work. Many residential streets built in the 1950s and 1960s are being maintained through patching and slurry, a tar-like substance that fills smaller cracks and seals the streets, but some need to be rebuilt.

Slurry costs 10 cents a square foot, but patching or rebuilding add $2 to $3 to the bill. Wentz said that delaying work makes it more expensive in the future, citing one road that was budgeted for $300,000 for repaving. The work was put off for three years and, by then, it had failed to such an extent that it required a $700,000 reconstruction.

A financial advisory committee, made up of 11 residents appointed by the council, has recommended that voters be asked to approve a utility-users tax of up to 9%. Among other things, the committee said the tax already is in place and stands a better chance of being approved than a new kind of tax, and it can be quickly adjusted as needs change.

Tax on Land Considered

The committee also raised the possibility of a secondary tax or fee on undeveloped land whose owners do not pay the utility tax, but Smith said there are legal questions the city attorney is researching.

"We don't know if you can specifically pick out a particular type of property and say that this qualifies for a tax and this one doesn't," he said.

In general, the committee said, a parcel tax on property would go against the grain of people who said they did not want more property taxes when they voted for Proposition 13 nearly a decade ago.

At this point, the council appears to be united on the need for money.

"We can't run the city on a shoestring because we'll end up tripping," said Councilman Robert Ryan--who is undecided about how to get revenue.

Parcel Tax Advocated

Ryan said he is convinced that a parcel tax, levying a specific amount of money on homes, condominiums, apartment units and undeveloped acreage, is the way to go.

Councilwoman Jacki Bacharach said she has not made up her mind, but added, "I tend to feel a parcel tax is more traditional and understandable to people."

McTaggart is opting for a "split tax" incorporating a parcel and utility-users tax at reduced rates "so the burden would not be too great on anyone." But unlike his colleagues, McTaggart said the ballot should contain a box for no tax at all.

"The public wants to have a choice," he said. "If they don't want the roads fixed, they won't get fixed. It should not be held over their heads that the roads will go to hell if they don't vote for it."

Utility-Users Tax Assailed

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