Westlake Seeks Panel’s Advice on Tax Rebates

Westlake Village is looking for a few good citizens to help it figure out how to play Santa Claus.

After wrestling with options for more than a year, the city is forming a volunteer blue-ribbon citizens committee to advise the city how to carry out a series of state-ordered tax rebates.

Next month, each of the five City Council members will select two nominees for the panel, which by mid-June will suggest to the council options for dealing with tax surpluses. Wednesday was the final day for residents to apply for positions on the committee, Westlake Village City Manager James Emmons said, but the applications had not yet been counted.

If financial projections hold true, the 5.4-square-mile city may be forced to refund as much as $4.1 million over the next 10 years, Emmons said.

The rebates are the result of the Gann Spending Limitation, a statewide tax reform measure approved by voters in 1979 to prevent cities from dismantling the property-tax-slashing Proposition 13.

The Gann initiative imposed a ceiling on the taxes state and local governments can collect and spend. Small annual increases above a base limit are permitted according to a formula based on a city’s population growth and the consumer price index. Any money collected over the limit must be returned to taxpayers within two years.

The new Westlake Village committee will explore ways of returning the surplus to taxpayers, such as through rebates on property taxes. Another option would be to hold a special tax-override election, in which voters are asked to increase the spending limit or approve proposals for spending the extra money.

Westlake Village’s initial revenue limit of $1.5 million was determined by the Los Angeles County Local Agency Formation Commission before the city incorporated in 1981. Because Westlake Village was not yet a city, the commission had difficulty figuring out a base rate for the community and set it too low, Emmons said.

The city of about 11,388 has experienced little residential growth but substantial increases in revenue-generating commercial and industrial development, Emmons said.

Commercial Growth Overlooked

“The Gann limitation only takes into consideration growth in terms of population. Here you’ve got a city three-fourths of the way built up, with no residential growth,” he said.

Westlake Village operated within the Gann limits its first three years, but exceeded them by $75,602 in the 1984-85 fiscal year, Emmons said.

Although it could have held an override election, the city decided to refund that money--but not how to return it.

The current revenue limit of $1.7 million is expected to grow to $4 million by 1994, but projections are that the city will collect more than its limit in taxes for the next 12 years, Emmons said.

The city exceeded the limit by about $58,000 in 1985-86. During the current fiscal year, the city is expected to exceed its limit by about $110,000. Projections are that the total will rise to $908,351 in 1991-92, before gradually leveling off to about $400,000 in the mid-1990s, Emmons said.

The city has set aside all money collected over the Gann limits in 1985-86 and will set aside future surpluses, Emmons said.

No Effect on Services

Basic city services have so far been unaffected, but the city could eventually have to cut back on street repairs, park development and other capital improvements, Emmons said.

Nine of 10 other California cities ordered to give similar rebates held tax-override elections, Emmons said.

But, at this point, Westlake Village officials favor rebating the money, perhaps by reducing residents’ assessments for street lighting and landscaping, or giving credits on property taxes or mobile-home fees.

The city has already considered but discarded the seemingly simple option of issuing refund checks to all city property owners after that proved logistically too complex, Emmons said.

“The administration for doing that almost exceeds the price of the rebate,” Emmons said.