The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge
— Stephen Hawking

 Updated Election Results

("Yes" won by 130 votes)

 Source: PVE Website http://www.pvestates.org/government/city-clerk/elections/2018-election-results

Source: PVE Website http://www.pvestates.org/government/city-clerk/elections/2018-election-results

5 minute Video-Everything You Need to Know About Measure E

To download and read the full presentation, click here

A Public Forum on Measure E

On April 4th, 2018 from 7:00 - 9:00 pm, PVrrg held a Public Forum on Measure E at the Malaga Cove Library at 2400 Vía Campesina, PVE.  The room was filled -- Standing Room Only. We were encouraged at the level of interest and engagement. For more information and videos of the entire event, click here. Below is an excerpt from one o f the speakers, City Treasurer Victoria Lozzi

Remarks by City Treasurer Victoria Lozzi

for a transcript of excerpts of her remarks, click here


Description:

If passed, Measure E will levy a parcel tax on the citizens of PVE for a period of 9 years.  This tax will generate approximately $5 million in revenue per year which can only be spent on the PVE Police Department (PVE PD).  Therefore, understanding the costs associated with retaining our police versus contracting with the Los Angeles Sheriff’s Department (LASD) may be useful to voters as they make their decision on this measure.  To that end Palos Verdes Residents for Responsible Government (PVrrg) has prepared the following Q&A material.

Note: PVrrg pledges to only present information that is unbiased and factual, with links to source documents to help our neighbors make educated decisions when they go to the ballot box. If anyone finds anything on this website that misrepresents a material fact, please contact info@PVrrg.org so we can correct it.

Background:  Palos Verdes Estates has been unique among Peninsula cities for having its own police department, and this has long been a source of comfort and pride for some of those living in our City. Our neighboring cities of Rancho Palos Verdes, Rolling Hills Estates and Rolling Hills all contract police services from the Lomita Station of the Los Angeles Sheriff’s Department.

For the Official Ballot and arguments pro and con, click here.

There are four other websites that present information relevant to Measure E, which represent the Pro's and Con's

  • Pro Measure E: www.pvestates.org -- The City of PVE has some relevant questions and answers on their website that relate to Measure E and the Police Department, to access this information -- click here.
  • Pro Measure E: www.savepvepolice.org -- A group of residents presents their perspective -- click here 
  • Pro Measure E: www.keeppvepd.org -- The Committee to Retain the PVE Police presents their perspective -- click here
  • Against Measure E: www.bluffcove.org -- There is also a lot of helpful information and links to documents concerning Measure E from the Bluff Cove Homeowners Association which is the group that wrote the "Opposition to Measure E" on the official ballot. Click here for the part of that website on Measure E.

The purpose of PVrrg's website is to present facts and source documents, objectively for your consideration. We do not take a position or make a recommendation.

We cannot vouch for all the statements in the four websites above, and specifically have found multiple instances of what we believe is incorrect or misleading information in the first three "pro" websites above. We have not found any factual errors in the "against" website above.

Mayor's Input:

While researching on the facts relating to Measure E, PVrrg sent out 8 questions concerning Measure E and PVE City finance on February 27, 2018.  Subsequently, we were happy to receive answers on these questions from Mayor Vandever on March 7. However, the Mayor’s reply created more questions in our minds.  So PVrrg Steering Committee decided to add our responses and new questions to seek more clarity. To view these original eight questions with the Mayor’s answers as well as our responses and new questions seeking clarity on the Mayor’s answers, click here.


Questions:

The questions addressed on our webpage on this issue are listed below. Click on a question and it will take you to that section of the webpage:

Q. How do I calculate my tax?

Q. Is this a new tax?

Q. How do I learn more about what our PVE PD does, and what are the opportunities for improvements?

Q. What is the true cost of having our own PVE Police Department, and what does the published budget include?

Q. How has the annual PVE PD budget changed over time?

Q. How much of a premium do we pay in PVE for Police Services, and how does our growth in cost compare to other Peninsula Cities that use LASD?

Q. If we retain our PVE PD, how confident should we be that costs would be contained and kept below the escalation we will likely see if we contracted with the sheriff?

Q. What would it cost if we outsourced police services to the LASD?

Q. If we outsource to the LASD, what will happen to our current Police Station in Malaga Cove and to our Police Officers?

Q. How do PVE PD and LASD-Lomita Station compare in terms of providing information to the communities they serve on such matters as crime prevention tips?

Q. What is the magnitude of our pension exposure?

Q. What is the consequence of the CalPERS underfunding

Q. How would pension costs be different if we outsourced to the LASD?

Q. I heard that PVE was recently ranked #91 of 482 cities in California on “Financial Stability.” So why should I be concerned about the pension implications of retaining our PVE PD?

Q. What is the difference in response times for PVE vs our neighboring cities served by the LASD?

Q.  How will outsourcing to LASD likely affect response times, and what does it mean to have a “Force Multiplier” if we contracted with the LASD?

Q. Will Shifting to LASD Make Our Schools Less Safe?

Q. What is our exposure to liability insurance premiums and claims under the PVE PD vs LASD?

Q. If we outsourced police services to the LASD, could we bring PD services back in-house if we are dissatisfied with LASD service once the City restored its financial health to the point when we could afford to pay the premium?

Q. How does the crime rate in PVE compare to our neighboring cities on the Peninsula?

Q. We like the continuity of PVE Police Officers who know their way around our city and have a relationship with our citizens. How might that change if we outsourced police services to the LASD?

Q. I’ve heard bad news about the LAPD in terms of pensions and corruption  – why would we want to consider outsourcing to them?


Questions and Answers:

Q. How do I calculate my tax?

  • Each home would pay $342 plus $0.20 for each square foot of building improvements -- meaning all assessable buildings and structures on the land (not just those you've remodeled), and this would generate about $5 million per year for 9 years. Fo more info on property taxes, click here.

Q. Is this a new tax

  • Technically, it is a “new” tax, since a previous tax expired when Measure D failed last year
  • However, for many decades, PVE had a separate tax initially created to fund the Fire Department. The “Fire Tax”aka “parcel tax” came up for renewal twice before 2017, and it passed each time. But in 2017, Measure D failed by only gaining support of about 60% of the voters; passage required 66.7% voter approval. The parcel tax in recent years has generated about $5 million per year; therefore, taxes for the past year were reduced by this amount, leaving a large hole in PVE’s revenue sources as the tax represented about 25% of revenue

Q. How do I learn more about what our PVE PD does, and what are the opportunities for improvements?

  • On March 14, 2017, Chief Kepley gave a presentation to City Council on the PVE PD which describes the organization and what everyone does – click here
  • In September 26, 2017, consultants Lewis McCrary Partners presented their PVE PD operation study with recommendations for improvement – click here. Recommended savings on the $7.5 Million budget were projected at about $800,000
  • At the same September 2017 City Council Meeting, PVE PD Union Rep Steve Barber stood up and said “The POA [Police Officers Association] is firmly opposed to any recommendation that involves police staff being cut.” For the video, click here and go to 3:08:00.
  • The City Manager, the PVE PD Union Rep and the City Council rejected the McCrary recommendations which included such items as outsourcing the jail. To view that presentation, click here and go to 44:30. For the staff report, click here.
  • City Council discussed on October 30, 2017 whether they would accept the recommendations, but this was not recorded, nor was a staff report issued. For the minutes of the meeting, click here.
  • November 28, 2017 was the followup discussion by City Council to determine next steps as a follow up to the McCrary report. For the staff report, click here. For the video, click here and go to 21:31:41.
  • For the City Manager’s comments regarding future police spending, click here and view segment at 1:53:20.

Q. What is the true cost of having our own PVE Police Department, and what does the published budget include?

  • The FY18 published PVE PD budget is $7.5 million, and includes community services such as PVE Cares, Neighborhood Watch, Peafowl Management, Disaster Preparedness, Neighborhood Amateur Radio Team (NART) and Animal Control which are valued by our Community. Those services would likely be retained whether the police department is out-sourced or remains internal since they are staffed largely with volunteers.  We therefore expect the remaining Community Services expenses to be a small fraction of the budget – the McCrary Study indicated their combined cost of $83,149 broken out here would remain with the City if the rest of police services were outsourced to the LASD.
  • In addition, PVE's unfunded Pension liability rose $2.8 million this year, bringing the overall cost to $10.3 million.
  • The annual PVE PD budget does not include the cost of underfunded pensions, liability insurance premiums, and cost of Finance and HR departments since payroll, accounts payable and human resources programs would likely decline significantly if we were to outsource to the LASD:
    • Underfunded pensions: see separate questions below
    • Insurance: Specifics unknown. PVE’s insurance premiums should be less if we outsourced our Police Services since the liability for Police actions would presumably be borne by the LASD. PVrrg has asked the City to quantify the difference in insurance cost, but we have not yet received a response.
    • Finance/HR: Specifics unknown. 42 of PVE’s 74 full-time employees are in the Police Department, so payroll processing would decrease and the accounting workload would be less because the City would no longer be processing PVE PD accounts payable. Click here for the list of employees by Department.
    • Legal: Specifics unknown. Some portion of the City Attorney’s time is spent on legal matters relating to the PVE PD; this includes negotiating Union Contracts and defending the City against police related lawsuits.

Q. How has the annual PVE PD budget changed over time?

  • Over the past seven years, the published cost of the annual PD expense (without charges for underfunded pensions) has grown at about 6% per year:
  Source: CAFRs (Comprehensive Annual Financial Reports)     click here      * Note the source for the $7,498,474 FY18 budget is the Budget document from May 9, 2017 (  click here  ). Recently the City has been saying the FY18 Police budget is $7,142,338 – this reflects onetime adjustments implemented this year that are onetime and do not reflect the ongoing cost of having an internal Police department. See comments by   councilman Kenny Kao  on January 10, 2018 (  click here )  and view segment at 1:52:40) on this subject of one-time adjustments. In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities have no unfunded pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.

Source: CAFRs (Comprehensive Annual Financial Reports) click here

* Note the source for the $7,498,474 FY18 budget is the Budget document from May 9, 2017 (click here). Recently the City has been saying the FY18 Police budget is $7,142,338 – this reflects onetime adjustments implemented this year that are onetime and do not reflect the ongoing cost of having an internal Police department. See comments by councilman Kenny Kao  on January 10, 2018 (click hereand view segment at 1:52:40) on this subject of one-time adjustments. In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities have no unfunded pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.

Q. How much of a premium do we pay in PVE for Police Services, and how does our growth in cost compare to other Peninsula Cities that use LASD?

  • Here is what each of our neighboring cities pay the LASD compared to our PVE PD published costs: 

  Source: Comprehensive Annual Financial Reports: For PVE,   click here ;    For RPV,   click here ;    For RH,   click here ;    For RHE,   click here  .   * In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities on the Peninsula (RPV, RHE and RH) have no unfunded police pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.

Source: Comprehensive Annual Financial Reports: For PVE, click hereFor RPV, click hereFor RH, click hereFor RHE, click here.

* In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities on the Peninsula (RPV, RHE and RH) have no unfunded police pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.

  • There is the risk that the LASD's costs go up in the future due to generally escalating policing costs, but that has not been the case for any of our neighboring cities who have seen annual changes in their LASD fees that have not exceeded the increases we've seen for the PVE PD, after adjusting for additional technology and service levels for RPV and RHE in FY 17 and FY 18 (see notes below)
 Source: Comprehensive Annual Financial Reports: For PVE,   click here ;  For RPV,   click here ;  For RH,   click here ;  For RHE,   click here ;  PVrrg analysis  * In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities have no unfunded pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.  ** Per the FY 17 Budget: "In FY15-16, three (3) Sheriff units dedicated to the City (two patrol and one detective) were added to the contract at the “growth rate” or introductory rate. For FY17-18, these additional positions will be charged at the standard rate." Thus, RPV added 2 officers on patrol, 1 officer detective, and spent $560,000 on 22 automated license plate detector cameras. That increase of three officers is equivalent to what we have now in PVE for our annual $7.5 M investment, but RPV went up only $1.7 M over those two years when the change was implemented  *** In FY 17 Budget, the increase in RHE police costs was explained: "Sheriff’s costs are set to go up by 3.7% due to contracted salary increases for deputies and an additional 3.5% due to increases to the Liability Trust Fund Surcharge (9.5% total surcharge). On-going increases will also be attributable to the addition of one detective for the Lomita Station Surveillance and Apprehension Team (SAT) in the amount of $55,000. A one-time increase of $80,000 for installation of the Automatic License Plate Recognition (ALPR) cameras is also reflected in this cost center."   **** In FY 18 Budget, the increase in RHE Police costs was explained: "Public Safety shows a substantial increase in FY2017-18 as a result of a number of factors. Sheriff’s costs are set to go up by 3.8% due to contracted salary increases for deputies and an additional 0.5% due to increases to the Liability Trust Fund Surcharge from 9.5% to 10% total surcharge. "  ***** IN FY 17 Budget, the increase in RH Police cost was explained: "It increase by 8.5% ($21,042) to accommodate a 3.5% increase for deputy salaries and 5% to accommodate the Sheriff Liability Trust Fund costs that are on the rise for higher awards for jury verdicts."

Source: Comprehensive Annual Financial Reports: For PVE, click hereFor RPV, click hereFor RH, click hereFor RHE, click here; PVrrg analysis

* In addition to the annual cost of $7.5 Million (which includes payments on current contribution to pensions), PVE PD also had a $2.8 million increase in unfunded pension. So the total FY 18 cost is over $10 million for PVE PD. The other cities have no unfunded pension costs, since they contract police services for a fee from the LASD and pension cost is included in the annual fee.

** Per the FY 17 Budget: "In FY15-16, three (3) Sheriff units dedicated to the City (two patrol and one detective) were added to the contract at the “growth rate” or introductory rate. For FY17-18, these additional positions will be charged at the standard rate." Thus, RPV added 2 officers on patrol, 1 officer detective, and spent $560,000 on 22 automated license plate detector cameras. That increase of three officers is equivalent to what we have now in PVE for our annual $7.5 M investment, but RPV went up only $1.7 M over those two years when the change was implemented

*** In FY 17 Budget, the increase in RHE police costs was explained: "Sheriff’s costs are set to go up by 3.7% due to contracted salary increases for deputies and an additional 3.5% due to increases to the Liability Trust Fund Surcharge (9.5% total surcharge). On-going increases will also be attributable to the addition of one detective for the Lomita Station Surveillance and Apprehension Team (SAT) in the amount of $55,000. A one-time increase of $80,000 for installation of the Automatic License Plate Recognition (ALPR) cameras is also reflected in this cost center." 

**** In FY 18 Budget, the increase in RHE Police costs was explained: "Public Safety shows a substantial increase in FY2017-18 as a result of a number of factors. Sheriff’s costs are set to go up by 3.8% due to contracted salary increases for deputies and an additional 0.5% due to increases to the Liability Trust Fund Surcharge from 9.5% to 10% total surcharge. "

***** IN FY 17 Budget, the increase in RH Police cost was explained: "It increase by 8.5% ($21,042) to accommodate a 3.5% increase for deputy salaries and 5% to accommodate the Sheriff Liability Trust Fund costs that are on the rise for higher awards for jury verdicts."

  • Further, the PVE PD total of $7.5 million does not include $2.8 million increase in pension debt last year caused by underfunding in CalPERs (see separate question on pensions); this police pension debt is now $10.7 M. In contrast, RPV, RHE and RH who use the LASD (which uses LACERA not CalPERS) have no police pensions obligations recorded in their CAFR.
  • To make the numbers comparable, it is important to index them to the number of residents, the number of homes and the area covered. There are differences that influence data such as RHE having a large commercial policing requirement in Peninsula Center and RH having much larger acreage per home. Also, RH spends $1 million per year on its manned gates. However, in general, PVE costs 3.5 – 4.0 times as much as RPV and RH spend one LASD on most measures.
 Source: CAFRs, Wikipedia and PVrrg analysis

Source: CAFRs, Wikipedia and PVrrg analysis

 Source: CAFRs, Wikipedia and PVrrg analysis

Source: CAFRs, Wikipedia and PVrrg analysis

  • This pattern is fairly consistent over time as shown in the chart below:
 Source: CAFRs, Wikipedia and PVrrg analysis

Source: CAFRs, Wikipedia and PVrrg analysis

 Source: CAFRs, Wikipedia and PVrrg analysis

Source: CAFRs, Wikipedia and PVrrg analysis

  • Much of PVE PD's challenge to be cost competitive with the LASD is due to the reality that PVE lacks sufficient critical mass. While PVE PD is 3-4 times more expensive than any of the other three cities on the Peninsula served by LASD (with the exception of RHE which is higher due to the large amount of commercial retail in Peninsula Center which needs to be patrolled), a comparison with the cost per person and per acre for the three most comparable small cities identified in the Lewis-McCrary Study (click here) shows PVE PD much closer to those benchmarks, although still more expensive.
 Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 64 --   click here ;  PVrrg analysis

Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 64 -- click herePVrrg analysis

  • Many PVE residents have expressed an interest in keeping our internal PD, and a subset of those are willing to pay a premium for that. The question is how much of a premium is each person willing to increase their taxes. Each person will come to a different conclusion on the amount of premium they are willing to pay, but the above data suggests that keeping our own police is at least 3.5 times more expensive than the outsourcing alternative, and even more when factoring in the pension exposure of an internal department (see Pension questions below).

Q. If we retain our PVE PD, can we be confident that costs will be contained and kept below the escalation we would likely see if we contracted with the Sheriff?

While in theory we should have more control over our PD costs, to date the City Council has not been able to contain costs in the PVE PD to a lower rate than the LASD has escalated their costs; after making adjustments for changes in service levels, Since FY 14 PVE PD costs have grown on average 5.9% while the other peninsula cities served by the Sheriff have grown at about 3%. 

 Source: Comprehensive Annual Financial Reports: For PVE,   click here ;  For RPV,   click here ;  For RH,   click here ;  For RHE,   click here ;  PVrrg analysis  See notes above under previous question for explanation adjustments to derive same service levels.

Source: Comprehensive Annual Financial Reports: For PVE, click hereFor RPV, click hereFor RH, click hereFor RHE, click here; PVrrg analysis

See notes above under previous question for explanation adjustments to derive same service levels.

  • When each City department was asked to dig deep last spring and find cuts to help address the gap from Measure D failure, the PVE PD came up with only $21,350 in personal cuts on a PD Personnel budget of $6 Million.
 Source: City Council presentation on May 9, 2017

Source: City Council presentation on May 9, 2017

  • When the consultant McCrary laid out a potential $800,000 in savings at the September 2017 City Council Meeting, PVE PD Union Rep Steve Barber stood up and said “The POA [Police Officers Association] is firmly opposed to any recommendation that involves police staff being cut.” For the video, click here and go to 3:08:00.
  • Recent PVE PD budgetary cuts down below $7.5 million have been labeled appropriately as "one time" by PVE government officials, including councilman Kenny Kao (For the video, click here and go to 1:52:40).  
  • City Manager Dahlerbruch has warned the City Council repeatedly  that he cannot estimate any future PVE PD budget, even including next year's, due to skyrocketing, "uncontrollable" CalPERS pension costs (For the video, click here and go to 1:53:20).

Q. What would it cost if we outsourced police services to the LASD?

In September 2016, PVE City Manager Tony Dahlerbruch obtained a quote from the LASD.  Click here for the quote that the City provided on 3/23/17 in response to a California Public Records Request (CPRA) for "all information pertaining to the LASD Quote”. Recently, we asked for this information again and here is the official email from the City Government responding to that record request and proving that the City had indeed received a quote despite denials from various City Council members during the run-up to Measure E -- click here:

Two options are covered:

  • Option A (current +12%): $3.4 Million for Current PVE Deployment plus 12% increase in patrol service hours. City Manager Tony Dahlerbruch prepared this slide for City Council:

 Source: LASD Quote from September 2016, obtained from PVE City Manager in response to a CPRA request. For the full document,   click here  . 

Source: LASD Quote from September 2016, obtained from PVE City Manager in response to a CPRA request. For the full document, click here

  • Option B (enhanced 50%) : $4.3 Million for 50% increase in patrol service hours over current PVE deployment. City Manager Tony Dahlerbruch prepared this slide for City Council:
 Source: LASD Quote from September 2016, obtained from PVE City Manager in response to a CPRA request. For the full document,   click here  . 

Source: LASD Quote from September 2016, obtained from PVE City Manager in response to a CPRA request. For the full document, click here

  • The next logical step would have been to request an official Sheriff Feasibility Study (SFS). On April 25, 2017, following the defeat of Measure D, PVE’s new Treasurer Victoria Lozzi stated that PVE “needs the feasibility study.” For video, click here and watch at correct placement at 2:27:00 .  Also, the City Manager recommended to City Council that such a Feasibility Study be undertaken, but City Council unanimously chose not to do so. For the City Manager’s recommendation on page 5 of the Staff Report click here, or watch the video by clicking here and watch at correct placement at 2:09:00.
  • The prospect of feasibility is high since the LASD’s Department protects every other city on the Peninsula and we share borders with RHE and RPV. The primary reasons feasibility studies fail is non-contiguous geography, which is clearly not the case here (see maps in the last question below). Without information from a Sheriff Feasibility Studay (SFS), PVrrg believes it is inappropriate and suboptimal to ask citizens to vote on Measure E and expect an informed outcome.
  • In October 2017, the City quietly updated the costs to $3.5 M for Option A and $4.5 M for Option B. Since there was virtually no change in cost estimates over a year’s period, it would seem to indicate that the 2016 quotes of $3.4 million and $4.3 million were firm, rather than loose, ambiguous or random.
  • Note that the LASD's public safety approach is that you pay for what you get.  When you want something more than what is in the LASD fee, you request it added to the contract; this happened recently when Rancho Palos Verdes increased its patrol coverage by specifying two additional patrol officers and one additional detective. So, the responsible thing to do is to NOT ask sworn police officers to do things that non-safety persons can do just as well -- for example, use volunteers whenever possible.
  • Note the LASD quote is about twice as high as the price that our neighboring cities pay the LASD on a per person/per home and per acre. If we negotiated and demanded the same rate as RPV and RH, we would be paying about $2 million per year (and nothing extra for pension). That is a huge savings over the $7.5 M - $10.3 M (including pension) that we pay now. Or we could ask for twice the patrol coverage, pay something like $4M and see the response times improve dramatically. See below:
 Source: CAFRs, Wikipedia and PVrrg analysis

Source: CAFRs, Wikipedia and PVrrg analysis

Price if parity with other cities.jpg

Q. If we outsource to the LASD, what will happen to our current Police Station in Malaga Cove and to our Police Officers?

  • There is a misperception that the Lomita Sheriff station will be home base for the cars that patrol PVE if we outsource to the LASD.
  • Under the $4.5 million Option B LASD scenario, the quote from the LASD (click here) says "Lomita Station will shift peninsula deployment to PVE as a force multiplier for the City." This is important because it states that not only will our PVE cars return to our existing Police Station in Malaga Cove, but the cars serving the other Peninsula cities (RPV, RHE and RH) may also drive through PVE to get to the home station. Force Multiplier means we get the benefit of this additional patrol car traffic without paying for it. For more information on this Force Multiplier concept, we suggest you watch this video (click here). 
  • The specifics of how the LASD would shift deployment to PV have yet to be articulated. But since the LASD did not say they were eliminating Lomita Station, a reasonable expectation is that the parts of the Peninsula closest to Lomita Station would deploy out of Lomita and the areas closest to PVE would deploy out of Malaga Cove. This has not yet been clarified because City Council has not yet authorized a Sheriff's Feasibility Study, even though it was proposed on April 25, 2017 by City Manager Dahlerbruch and City Treasurer Lozzi.
  • For more information on Force Multiplier and the implication for response times and coverage, see separate question below on “How will outsourcing to LASD likely affect response times, and what does it mean to have a 'Force Multiplier' if we contracted with the LASD?"
  • As for what will happen to our current Police Officers, perhaps the best analogy is when PVE gave up on our internal Fire Department in the 1980s and contracted with the County. We’ve been told that the County retained PVE FD personnel, and it was viewed as a positive by our firemen who saw more career opportunities with a larger institution. 

Q. How do PVE PD and LASD-Lomita Station compare in terms of providing information to the communities they serve on such matters as crime prevention tips?

Both organizations have active programs to engage their respective communities. RPV runs some of their programs supplemental to its LASD contract and PVE could do likewise if it chose to outsource policing to LASD.

For the PVE PD website, click here.  Examples of useful programs and tips on crime prevention:

For the RPV/LASD website, click here.  Examples of useful programs and tips on crime prevention:

Q. What is the magnitude of our pension exposure?

  • PVE participates in CalPERS (click here for their website), which is the pension plan for California state and local employees. Each year, PVE makes a contribution based on the assumption that the fund will grow at 7.5% per year and hence cover pensions when PVE employees retire.
  • CalPERS has failed to meet their investment objectives. The average over last decade has been 4.4% per year, well below the 7.5% target rate. For more specifics on year by year returns, see question "How would pension costs be different if we outsourced to the LASD" below.
  • When this underperformance occurs, CalPERS calculates additional assessments to cover the difference and increases a city’s liability by issuing debt, which each city can choose to pay down all at one time or pay down over time with interest at the rate of 7.5% per year.
  • In FY 15, the City disclosed for the first time that it had $10 million of such debt; in FY 17 the debt increased by $3 million and this year by another $1 Million -- thereby increasing the total liability/debt to $14 million; of this, $10.8 million relates to the PVE PD. The total liability will continue to rise if CalPERS continues to fall short of their investment goal.  

Q. What is the consequence of the CalPERS underfunding?

Q. How would pension costs be different if we outsourced to the LASD?

  • The most important difference is that with outsourcing, we would pay a contracted flat fee for LASD that is independent of how LASD's pension fund performs in the future, and our fee cannot be retroactively adjusted if performance is subpar – unlike the situation we currently face with CalPERS.
  • The LASD contracts with LACERA (Los Angeles County Employees Retirement Association) rather than CalPERS -- click here for the LACERA website.
  • Compared to CalPERS, LACERA’s performance has been better:
 Source: FY 17 Comprehensive Annual Financial Report for CalPERS (  click here  ) and for LACERA (  click here  )

Source: FY 17 Comprehensive Annual Financial Report for CalPERS (click here) and for LACERA (click here)

This cumulative difference in performance has left CalPERS more underfunded than LACERA, and this is what is driving the $14 Million in Pension obligation that PVE has had to assume since 2015.

 Source: FY 17 Comprehensive Annual Financial Report for CalPERS (  click here  ) and for LACERA (  click here  )

Source: FY 17 Comprehensive Annual Financial Report for CalPERS (click here) and for LACERA (click here)

  • Yes, LACERA is still 20.6% underfunded, but this is less than the 31.7% underfunding at CalPERS. So which Pension Fund you are linked to does matter.
  • Put differently, CalPERS is 7 times the size of LACERA in terms of Accrued Actuarial Liability (the amount they will have to pay out) but CalPERS is 15 times the amount of unfunded liability.
  • Unlike CalPERS, LACERA has exceeded fund benchmarks over most periods
  • There is the risk that the LASD's costs go up in the future due to generally escalating policing costs, but that has not been the case for any of our neighboring cities.  They have seen annual changes in their LASD fees that have not exceeded the increases we've seen for the PVE PD, after adjusting for additional technology and service levels.  See "Q. How much of a premium do we pay in PVE for Police Services, and how does our growth in cost compare to other Peninsula Cities that use LASD" for more information.

Q. I heard that PVE was recently ranked #91 of 482 cities in California on “Financial Stability.” So why should I be concerned about the pension implications of retaining our PVE PD?

On March 26th, the City of PVE posted on Nextdoor that it was in the top 100 cities in California in terms of “Financial Stability”.  This was based on a report published by Senator John Moorlach (click here).

The methodology is based on a single snapshot in time (FY 17) and does the ranking by “Unrestricted Net Position per Capita” defined as follows:

  • Starts with “Net Position” which for FY 17 at PVE is $58,234,352. (Note the City has repeatedly told PVrrg that "Net Position is a meaningless number.”
  • Then it deducts liabilities including pensions liabilities. Note the City keeps telling us that “pension liabilities aren’t debt” and hence are not “real.”
  • The result is “Unrestricted Net Position” which is defined in the PVE CAFR as "which may be used to meet the government’s ongoing obligations”
  • In FY 17 CAFR, PVE’s UNP was $8,958,644
  • That is then divided by population to derive UNP per capita

So while PVrrg is pleased that PVE is in the top 100 of 482 Cities ranked, the downward trend in UNP is alarming. It has dropped from $28.9 M in FY 10 to $9.0 M in FY 17.

    Source: CAFRs

Source: CAFRs

Also, our neighboring cities of Rancho Palos Verdes and Rolling Hills are doing considerable better than PVE.

    Source: Sen. John Moorlach’s CAFR Rankings, March 14, 2018  * Rank out of 482 cities in California 2017

Source: Sen. John Moorlach’s CAFR Rankings, March 14, 2018

* Rank out of 482 cities in California 2017

PVE City Council has deflected concern over the pension liability situation by saying that all Cities suffer from this challenge. To some extent that is true, but just looking at our closest neighbors they do not seem to suffering the 69% deterioration that PVE has seen in the last seven years. Rolling Hills has been flat and Rancho Palos Verdes has trended down at a lower rate than PVE. The most significant driver causing this phenomenon has been the heavier influence of CalPERS in PVE, with 78% of PVE's unfunded pension liability attributable to the PVE PD. RH and RPV are insulated from that because they contract with LASD and hence are not saddled with LACERA's unfunded pension liability of 20% vs. CalPERS's unfunded liability of 32%. Note these are long-term trends, and have nothing to do with Measure D not passing in 2017.

    Source: CAFRs; PVrrg Analysis

Source: CAFRs; PVrrg Analysis

So before getting too celebratory and resting on our laurels, PVrrg believes it is important to acknowledge our deteriorating financial position and work together to stop the hemorrhaging. But even if it is, our leaders need to recognize we have a problem, stop dismissing those who point out the challenges our City faces, and work together to find solutions.

For comments from others on this topic on Nextdoor, click here.

    Q. What is the difference in response times for PVE vs our neighboring cities served by the LASD?

    • PVE's official post explaining response times can be found by clicking here.
    • The Lewis -McCrary Report described response times for PVE PD in the first six months of 2017 as follows:

     Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 39 --   click here

    Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 39 -- click here

    • The LASD Lomita Station states that there goal is to achieve a 6 minute response time:
     Source: Rancho Palos Verdes FY 18 Budget --   click here  .

    Source: Rancho Palos Verdes FY 18 Budget -- click here.

    • Also comparisons across cities are highly dependent on how much patrol coverage a city selects in negotiating the LASD contract. It is not a one size fits all. For instance, in FY 17 RPV began paying $1.7 M more for an extra 2 patrol cars. PVrrg has requested information of the LASD to understand better the response times both before and after that change in order to shed light on what might happen to response times in PVE if the decision were made to outsource to LASD with 50% more coverage than PVE has now. When we get a response, we will post it here.

    Q.  How will outsourcing to LASD likely affect response times, and what does it mean to have a “Force Multiplier” if we contracted with the LASD?

    • Response time is a function of the number of patrol cars on the road at any one time. A PVE PD police car drives no faster or slower than an LASD car. The speed of dispatch does not seem to be materially different for the two police departments. The two Sheriff quotes were for 12% and 50% more coverage, so the response times for the LASD would presumably be equal to or better than current PVE PD response times. Moreover, the LASD quote states “Lomita Station will shift peninsula deployment to PVE as a force multiplier for the city.” (for the quote, click here) What this means, is having cars go to and from RHE and RPV from the Malaga Cove Police Station could mean that potentially more cars are available for deployment in PVE when a PVE call is received.

    • Finally, the Lewis-McCrary Report surveyed police agencies in La Palma, Los Alamitos, and San Marino with internal police department with similar characteristics such as size, population and expectations of public safety service delivery to that of Palos Verdes Estates and found response times comparable to or lower than PVE:
     Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 64

    Source: Lewis-McCrary Partners Police Operations Study, September 2017, Page 64

    Q. Will Shifting to LASD Make Our Schools Less Safe?

    At least one of our local schools has sent letters to parents urging a vote for Measure E and citing that response times for school emergencies would increase from 3 minutes to 15-20 minutes because that's how far away Lomita Station is. This "15-20 minute response from Lomita" is a common misperception, and is simply not true at any level:

    • Emergency response today comes from PVE PD patrol cars constantly on patrol — not from the police station. Nothing would change
    • LASD quote shifts Peninsula Deployment to Malaga Cove — so no change there
    • In a true emergency, LASD brings more "surge capacity” with a much larger pool of cars on patrol at any given moment
    • We can afford more patrol coverage with LASD than we have now with PVE PD, and at a significantly lower cost

    So our schools should feel no less safe if the decision were made to contract with LASD

    Q. What is our exposure to liability insurance premiums and claims under the PVE PD vs LASD?

    Currently, PVE is insured against liability claims for actions of our police officers. Recently, for instance, liability insurance covered the litigation cost of defending the PVE PD and the City in the “Bad Boys” surfer litigation (click here for an LA Times article March 29, 2016 on “Lunada Bay surfer gang targeted by class action suit.” PVrrg does not know the magnitude of the insurance policy premiums that cover such claims, nor how fast those premiums have been going up because of more incidents in the past few years. However, it is clear that if PVE outsourced to LASD, the cost of liability insurance would drop dramatically because those costs would be baked into the fees charged by LASD, and that the savings should be factored into the cost comparison of retaining our PVE PD vs outsourcing to LASD.

    LASD is the largest Sheriff’s Department in the world, with 18,000 employees. Clearly there are some “bad apples” in such a large organization, and those bad apples do generate liability which is collectively shared across all cities which contract with the LASD. For example, click here for an LA Times article on April 9, 2017 titled “Sheriff's Department misconduct-claim payouts have soared, topping $50 million last year”.  These claims are paid out of a “Liability Trust Fund” that is replenished with premiums that are built into the annual fee charged by LASD. In the last few years, the claims experience has exceeded those premiums so the surcharge (premium) has been growing– click here for references to those assessments in the notes to the Annual Budgets of RPV (4% in FY15, 6% in FY16, 9.5% in FY 17 and 10% in FY 18) and RHE (5% in FY15, 5% in FY16, 9.5% in FY 17 and 10% in FY 18). For letters from the CEO of the County of Los Angeles describing “Actuarial Studies of Liability Trust Fund”, folow the links below:

    • Click here for a letter dated August 14, 2014 stating this surcharge was increased to 5% effective January 1, 2015 
    • Click here for a letter dated May 4, 2016 stating this surcharge was increased to 9.5% effective July 1, 2016 

    Q. If we outsourced police services to the LASD, could we bring PD services back in-house if we are dissatisfied with LASD service once the City restored its financial health to the point when we could afford to pay the premium?

    • It’s challenging to determine how difficult or possible it would be to re-create and bring an internal police department back in-house. There are examples of cities that have gone from County Police Service to internal police departments (such as Sedona, Arizona), but it is rare.

    Q. How does the crime rate in PVE compare to our neighboring cities on the Peninsula?

    • Each city has some unique characteristics that make it challenging to make apples-to-apples comparisons. For example:
      • Rolling Hills is gated with security cameras and only limited entry/exit, thus a reduced crime opportunity
      • Rolling Hill Estates has higher crime due to extensive retail in Peninsula Center
      • Palos Verdes Estates has only five access points coupled with being bordered by the Pacific Ocean (with steep cliffs) for roughly 40% of its border
      • Rancho Palos Verdes is also bordered by the ocean, but there are more access points
    • With those caveats in mind, PVrrg is aware of three relevant survey rankings, and each has merits although they lead to somewhat different conclusions. For completeness we will cover all three.
    • Niche.com's "2018 Safest Places to Live in Los Angeles County". This grade takes into account key indicators of a location’s safety, including violent and property crime rates as well as resident reviews, in an attempt to measure an area’s safety and security. This ranking shows that all four cities rank high on safety among the 200 cities in Los Angeles County (click here): 
      • #1 Rolling Hills (Served by LASD)
      • #4 PVE (Served by PVE PD)
      • #9 RPV (Served by LASD)
      • #22 RHE (Served by LASD)
    PV Rank 4 on Safest CIties in LA.png
    • FBI Database: For the specific crime rates, here is the comparison data from the FBI (for the website, click here):
    • SafeWise Report's most recent "The 50 Safest Cities in California—2017" ranked Palos Verdes Estates #24, down from #7 the previous year. This was the biggest ranking drop of any of the cities in the Top 50.  The other cities in PV Peninsula were not listed in the top 100.  For the report, click here
    • Alarm.org's & National Council for Home Safety & Security's Survey of the Safest Cities in California. Methodology involved ranking based on the number of reported violent crimes (aggravated assault, murder, rape, and robbery) and property crimes (burglary, arson, larceny-theft, and motor vehicle theft) per 100,000 people. These variables were then weighted, with violent crimes accounting for 70% of the total (due to their severity) and property crimes accounting for 30%. Finally,  the decimal point was moved over a few spots to show rates per 1,000 people. For the 2017 survey, click here. For the 2018 Survey, click here.
      • Rolling Hills (Served by LASD) not ranked in 2018 or 2017
      • PVE (Served by PVE PD) #4 in 2018 up from #30 in 2017
      • RPV (Served by LASD) #11 in 2018 up from #37 in 2017
      • RHE (Served by LASD) not ranked in 2018 but #40 in 2017
    PV Rank 4 on Safest CIties.png

    Q. We like the continuity of PVE Police Officers who know their way around our city and have a relationship with our citizens. How might that change if we outsourced police services to the LASD?

    • History: note that in the 1980s, when PVE shifted from an internal Fire Department to outsourcing fire services to LA County, our firemen stayed in our station and started to work for LA County instead of the City of PVE. That transition seems to have gone smoothly in the eyes of most residents.
    • Local deployment: we anticipate the LASD would hire many of those employed by the PVE PD and continue to deploy them locally in PVE.
    • Community policing: we understand the LASD executes a community policing model where it tries to staff the same officers within each of the PV Peninsula Cities.
    • Vacation and sick day coverage: we anticipate that officers could be assigned temporarily from other local deployments and there are advantages of this in terms of lower overtime costs by having access to a broader pool. Overtime has been a large cost for PVE PD
    • Transfer options: should an officer request transfer to another jurisdiction within LASD, continuity may be reduced, but a source at the Lomita Station indicated in a conversation with a PVE resident that the LASD makes every effort to maintain continuity and transfers rarely occur.  The other side of transfer is requests by our citizens. If PVE residents don’t like how a particular officer is policing, it is relatively easy to get LASD to move him.  This is much harder to do that with a PVE PD union officer.

      Q. I’ve heard bad news about the LAPD in terms of pensions and corruption  – why would we want to consider outsourcing to them?

      • Los Angeles Police Department (LAPD) is totally separate from the Los Angeles County Sheriff’s Department (LASD).  The quote that PVE received was from LASD, not LAPD. LAPD is like PVE PD – an independent local police department. LASD is an organization that provides contract police services to municipalities that have chosen not to have internal police departments.
      • Here is the map of municipalities covered by LASD:
       Source: LASD

      Source: LASD

      • Note that the Lomita Station that would serve us is focused on serving the Palos Verdes Peninsula, and is hence not distracted by “serious crimes being committed outside Palos Verdes", as the supporters of Measure E have claimed. 
       Source:  LASD

      Source: LASD


      Consequences

      The following flowchart was obtained through a public records request from the City of PVE. It is part of correspondence between the Committee to Retain Palos Verdes Estates (PVE) Police and the City Manager. 

       Source: Records request on correspondence concerning Measure E

      Source: Records request on correspondence concerning Measure E


      Chronology of Events:

      On March 7, 2017, Measure D failed in the election when It got just under 60% Yes. 2/3 was required for passage

      On April 25th, 2017 Palos Verdes Estates City Council began discussing its financial options in the aftermath of Measure D not passing.

      On January 10, 2018 Palos Verdes Estates City Council unanimous passed the authorization for Measure E. For the staff report, click here. For the video of the discussion, click here and watch at correct placement at  1:12:00. All five council members have expressed support for the Measure.


      Voting Record of Elected Officials:

      The current City Council unanimously voted to proceed with an election on Measure E on January 10, 2018.  

      Voting For:  Jim Vandever (Mayor), Betty Lin Peterson (Mayor Pro-tem),  Jim Vandever, Kenneth Kao, Sandy Davidson

      Voting Against: None

       


      Full Transparency Pledge

      PVrrg pledges to update our website when we have access to new information. Since this page was first posted in early March 2018, the following changes and updates have been made:


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