Westlake Panel Calls for Election to Let City Keep $600,000 Surplus

A 10-member citizens committee is recommending that Westlake Village city officials ask voters for permission to keep and spend $600,000 in excess tax revenues rather than return the money to taxpayers.

Under the plan, the city would hold a tax override election Nov. 3 on retaining the $600,000 surplus that officials project will be collected in fiscal years 1985-86 through 1988-89.

The money should be placed in a special fund for essential services and capital improvements, the committee recommended in a report submitted to the City Council Wednesday.

In particular, the committee mentioned “new or enhanced municipal services such as additional sheriff patrols or a recreation program.”

The tax surplus is the result of the Gann Spending Limitation, a statewide tax-reform measure approved by voters in 1979.

Ceiling on Taxes

The law imposes a ceiling on the taxes state and local governments can collect and spend. It requires any money collected over the limit to be returned to taxpayers within two years unless a city holds a tax-override election in which voters approve increased spending limits or approve other uses for the money.

The City Council has already voted to give taxpayers a $75,602 rebate for the 1984-85 fiscal year, probably by reducing residents’ assessments for street lighting and landscape maintenance, said City Manager James E. Emmons. The City Council will decide the exact form of the rebate July 8 as well as vote on the committee’s recommendations, he said.

But, if the city pays out rebates in successive years, projections are that it will have a $2.5-million budget deficit by 1995-96, the report stated.

After wrestling with options for more than a year, the City Council in March formed the volunteer committee to advise the city on the tax matter.

The committee also recommended that the city work with the League of California Cities and other cities with similar problems to seek to persuade the state and county to raise Westlake Village’s Gann limit.

Formula for Increases

Under the Gann law, small annual increases tied to a base limit are permitted according to a formula based on a city’s population growth and the consumer price index.

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 could only estimate the base rate and set it too low, Emmons said.

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 of taxes for the next 12 years.

The city may be forced to refund as much as $4.1 million over the next 10 years, Emmons said.

The committee recommended that the city seek legislation allowing cities that incorporated after the Gann law was passed to correct limits that were set too low.

If the city is unable to secure such legislation, the committee recommended that a second override election be held in 1989 or 1990 to cover the four-year period ending in 1995-96.