As a real estate professional and advisor in the South Bay and Palos Verdes areas (reviews and endorsements from clients), I pay close attention not only to market trends—but also to municipal decisions that directly affect property owners. A recent proposal by the City of Palos Verdes Estates (PVE) has stirred significant concern among residents, especially those who value fiscal responsibility. At the center of the discussion is a proposed parcel tax that could reach up to $17.5 million annually—possibly the largest of its kind in California; at an average of $3,500 per parcel and increasing annually.  Large taxes on homes reduce their competitiveness in the market because it adds to the price, just like a large Homeowners Association Fee.

Let’s unpack what’s happening and why it matters.  Click here for the full article published by PreservePVE ; a community newsletter from residents for the community.

Meanwhile, are you interested in getting a temperature check on the Palos Verdes Estates real estate market?  Which homes were just picked by buyers and are now in escrow?  Knowing how and what real Buyers just choose provides hidden insight to the Palos Verdes Homes and the direction of the market.  Check back to this link as often as you wish; it will automatically update with the latest escrowed Palos Verdes Estates homes. 

The Proposal: $7 Million Baseline or $17.5 Million for “Nice to Haves”?

The City Council has laid out two options:

• A $7 million baseline tax, primarily to continue existing services, including a $5.1 million allocation to police and nearly $2 million to cover an ongoing deficit.

• A $17.5 million tax that includes a slate of “anticipated needs”—but these are arguably non-essential enhancements such as tree trimming citywide, infrastructure placeholders, and increased reserves.

The Council has not given residents the opportunity to vote on a menu of choices or prioritize spending. Instead, they’re asked to either accept a significantly higher tax or risk losing essential services—a classic all-or-nothing approach.

Why This Is Raising Eyebrows

1. Escalating City Spending vs. Inflation

Over the past six years, PVE’s general fund spending has increased by approximately 9% per year—more than twice the rate of inflation. This pace of growth is unsustainable and points to systemic issues with cost control.

2. Questionable Allocation of $17.5 Million

When breaking down the proposed $17.5 million tax, several components appear weakly justified:

• $4.4 million for infrastructure without cost validation

• $1.3 million for pension stabilization—but contradictory descriptions from officials

• $1.9 million for a fund balance that already exceeds policy requirements

• $1.5 million for wildfire prevention, despite available Measure E County funding

Wouldn’t it be more prudent to address confirmed liabilities and leverage county grant funding before increasing local taxes?  Why not use the City’s recent resident survey to guide decisions on priorities?  Why not provide the residents a cost breakdown of what is in the $17.5 million tax?  Why not give residents a choice as to what additional services are provided for tripling their taxes and let them choose what they value and can afford?

Staffing Efficiency: A Missed Opportunity?

Despite long standing challenges in hiring and retaining staff, the city now plans to add 8 new full-time positions.  Yet, the city is unable to tell the residents why this 12% additional staffing is needed and what all these people will do.But city records show:

• Staffing levels haven’t changed since 2019 (56.5 FTEs)

• Vacancy rates hover at 15%+

• Prior cost savings were realized by not filling those positions

Why not continue leveraging outsourcing and contracted specialists, especially for non-core functions like finance?

Two Sides to the Story—But One Path Forward

Some residents may feel justified in wanting improved services—tree trimming, more patrols, beautification. However, these enhancements must be weighed against long-term costs and the precedent of spending without prioritization.

We must ask:

• Is 9% annual increase in spending indicative of inefficiencies that are a root problem that needs to be addressed?

• Are we solving the root problems or just layering new expenses?

• Are residents being presented with transparent, data-driven choices?

From a consulting standpoint, a strategic approach would include:

• Independent audits

• Tiered ballot measures

• Root problem and Comparative cost analyses

• Comparative cost analyses

• Prioritizing essential services and debt reduction

Final Thought

Palos Verdes Estates has always been a unique, desirable community. But preserving its charm and stability requires not just vision, but fiscal responsibility to ensure it is sustainable and enduring.

📩 Want to understand how these decisions could affect your property, investment strategy, or taxes?

Use the "CONTACT US" tab at the top of this page—I’m happy to help you assess the impact and chart the best course forward.