CC SR 20161220 F - Participation in LA County Fire DistrictRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 12/20/2016
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
Consideration and possible action to receive and file a report regarding the City's
participation in Los Angeles County Fire District.
RECOMMENDED COUNCIL ACTION:
(1) Receive and file a report regarding the City's participation in Los Angeles County
Fire District, and direct Staff to follow Option 2 identified in the report.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Deborah Cullen, Director of Finance
REVIEWED BY: Gabriella Yap, Deputy City Manager.
APPROVED BY: Doug Willmore, City Manager'/!✓�J
ATTACHED SUPPORTING DOCUMENTS:
A. Property Tax Dollar Breakdown (page A-1)
BACKGROUND AND DISCUSSION:
The City was incorporated in 1973. Prior to incorporation, fire protection services to
territory that includes the City was furnished by the Consolidated Fire Protection District
of Los Angeles County (Fire District). In July 1973, a study of the proposed
incorporation of Rancho Palos Verdes was conducted, in which it was suggested that
fire protection services continue to be furnished by a "special district," referring to the
Fire District.
The Fire District provides general fire protection services to the City in lieu of a City -run
fire department. Services include fire prevention, fire suppression, and life safety
services throughout the City through Battalion 14, through two (2) fire stations in the
City.
Prior to the passage of Proposition 13 (Prop 13) in the late 1970s, the Fire District had
the ability to levy a property tax rate to fund services. When unincorporated areas were
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annexed or a city contracted for services, the Fire District levied its tax rate to generate
funding to pay for services.
This changed when the passage of Prop 13 restricted the total property tax levy to 1 %
of a property's assessed value. As with all existing taxing agencies, the Fire District
was proportionally allocated a share of the 1 % property tax in the existing areas. Thus,
the nexus of service cost -to -revenues was lost for the future. Today, the Fire District
collects and expends revenues on a district -wide basis, attempting to provide a
relatively consistent level of service regardless of the revenues derived from a specific
area or specific city.
The Fire District receives an average of 17% or $0.17/$1.00 of the 1 % property tax for
all cities that are part of the Fire District. Specifically, property tax payers in the City of
Rancho Palos Verdes contribute $0.1697 of every property tax dollar for fire services
(Attachment A). Based on the assessed property value in FY15-16, the City's portion of
the property tax revenue collected by the Fire District totaled $20.1 million. The $20.1
million paid in property tax revenue by RPV tax payers far exceeds the cost of the
service.
Staff was asked to look into options that might be available to change or alter the way
that Fire Services are provided to the City to more adequately match revenue with cost
of service. There look to be only two distinct options.
Option 1:
First, based on information obtained from discussions with the Fire District and the City
Attorney's office, the City could file an application through the Los Angeles County Local
Agency Formation Commission (LAFCO) to detach from the Fire District. Going
through LAFCO appears to be the only viable way to detach from the Fire District. If
LAFCO approved the City's separation from the Fire District, the Fire District would
reimburse the City for the costs to operate their own fire department or contract with
another department for fire services (approximately $10-14M annually). Essentially, this
would mean that the City would keep $10-14M of the $20M that City residents pay
toward the Fire District. Unfortunately, the remainder of the property tax currently
collected by the Fire District ($6-10M) would not be retained by the City or could not be
given back as savings to the property owners within the City. Rather, it would either be
redistributed to other agencies on the Peninsula, such as the Palos Verdes Peninsula
Unified School District or the Palos Verdes Library District, or would most likely just
remain in the County "pool." In this scenario, the City would be taking on a considerable
effort and cost to establish its own fire department or contract with another department,
with the likelihood of no appreciable benefit in tax savings or benefits to residents. Staff
does not recommend this course of action.
Option 2:
The second option is to work with the Fire District to increase service levels in the City --
basically ensuring that more of the property tax collected is used to support fire services
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in the City of Rancho Palos Verdes. Initial discussions with the Fire District have proven
to be very positive in this regard, and there is recognition that more resources and
services could be available to the City. Assuming the City Council supports this
direction, Staff will pursue more in-depth discussions and alternatives with the Fire
District to identify opportunities to ensure the City continues to receive both the highest
level of service and the greatest value for the taxes paid by the City's property owners.
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COREN&CONE
THE CITY OF RANCHO PALOS VERDES
PROPERTY TAX DOLLAR BREAKDOWN
$ 0.2445 Los Angeles County
$ 0.1970 Palos Verdes Peninsula Unified School District
$ 0.1697 Los Angeles Consolidated Fire District
$ 0.1453 Educational Aug. Fund Impound
$ 0.0746 Educational Rev. Augmentation Fund
$ 0.0637 Tax District #1
$ 0.0325 Palos Verdes Library Dist. Maint.
$ 0.0292 LA City Community College District
$ 0.01168
Co. Sanitation Dist. No. 5 Operating
$ 0.00933
La County Flood Control Maint.
$ 0.00808
County School Service Fund- Palos Verdes
$ 0.00691
La County Ffw
$ 0.00272
Childrens Instil. Tuition Fund
$ 0.00165
La County Flood Dr. Imp. District Maint.
$ 0.00137
County School Services
$ 0.00088
Develop. Center Handicapped Minor- Palos Verdes
$ 0.00030
La Community College Children's Center Fund
$ 0.00019
La County West Vector Control Dist.
$ 0.00017
Wtr Replenishment Dist. Of So. Cal
$ 0.00011
La County Accum. Cap. Outlay
$1.0000
ATI (Annual Tax Increment) Ratios for Tax Rate Area 07090, Excluding Redevelopment Factors & Additional Debt Service__
Data Source: Los Angeles County Assessor 2016/17 Annual Tax Increment Tables Prepared On 8/31/2016 By MV
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone A-1 Page 23