City Council Delays Action on Assessment District Plan : Rancho Palos Verdes: Angry property owners protest during meeting. The issue will be considered again Sunday at a special budget session.

Heckled by a small, noisy group of angry property owners, the Rancho Palos Verdes City Council on Tuesday backed down from creating a special assessment district that would raise $868,000 in new revenue.

But the issue will come up again during a special meeting Sunday, when the council will convene to discuss ways of dealing with a severe budget crisis.

Already facing a $1-million shortfall in its 1992-93 budget and the possible loss of much more in state revenues, council members told a crowded public hearing that the city can no longer provide even minimal services without more funds.

“We’ve already cut to the bare bones . . . (but) can’t balance the budget on the income we have now. And we know the state is going to take away more money from the cities,” Councilwoman Jacki Bacharach said.

The city is considering forming a citywide landscaping and lighting assessment district that would levy a $51 annual charge on the average home in the upscale bedroom community. The money would be used to maintain parks, median strips and traffic signals.

City officials say the council can create the district by a simple majority vote because fewer than 15% of the city’s property owners have filed written protests with the city clerk. At Tuesday’s meeting, officials said only 2.5% of the 16,000 property owners in the city had filed protests opposing the new district.

Crying “no taxation without representation,” about 100 protesters packed the council chambers and contended that city officials were trying to circumvent the will of the people by creating the district. In April, city voters narrowly defeated a proposed parcel tax that would have helped balance the budget.

Most of the 31 people speaking out against the measure claimed such a district also violated the property tax restrictions imposed by Proposition 13, the anti-tax measure passed in 1978.

“This is just a way to get around Prop. 13. . . . If you pass this (special district) it will be time to recall everyone on the council,” said Sam Gordon, a local resident. His words drew applause and cheers from other property owners.

Several residents suggested the city should sell off some of its parks and make other budget cuts, rather than try to raise taxes or create assessment districts.

Only three of the five council members were present at Tuesday’s meeting. Two, Robert Ryan and Susan Brooks, were on vacation.

Rather than vote on the controversial issue Tuesday, the council tabled it until Sunday, when a special session will be held and at least one of the vacationing council members will be back. The weekend meeting was called because the city must act on or before Aug. 10 to meet the deadline for forming such a district this year, officials said.

If approved on Sunday, the new tax would go into effect almost immediately, officials said.

Rancho Palos Verdes, a city of 42,000 incorporated almost 20 years ago, is facing a financial crisis because of budget shortfalls. The council has already cut $1.5 million from its budget and laid off nearly a third of the city employees, reducing the number of employees to 36. Even so, the council is far short of balancing the $7.2-million general fund budget, officials explained.

In addition, the city could lose as much as $2 million in state revenues as the governor and the Legislature battle over how to cut billions from the state budget, city officials said.

The city has only two choices, raise more money or go out of business, Councilman Steven Kuykendall said. While he initially favored forming the district, he reversed his position after the hearing Tuesday.

“I am not prepared to go ahead with the district at this time,” he said. Instead, he wants to put the fiscal problems squarely before the voters.

“It’s time the voters make a choice whether or not they want a city,” he said. If the answer is yes, then it means more taxes. If the answer is no, “perhaps it’s time to eliminate city government,” he said.

Mayor John C. McTaggart and Bacharach opposed such a suggestion but postponed any decision on the issue until Sunday.