6/23/1976MINUTES OF THE
ADJOURNED MEETING OF THE CITY COUNCIL
CITY OF ROLLING HILLS, CALIFORNIA
June 23, 1976
An adjourned meeting of the City Council was called to order by
Mayor Rose at 7.30 P.M. Wednesday, June 23, 1976 at the Administration
Building, 2 Portuguese Bend Road, Rolling Hills, California.
ROLL CALL-
PRESENT- Coun.cilmembers Crocker, Heinsheimer, Swanson
Mayor Rose
Councilman Pexnell arrived at 8.00 P.M.
ALSO PRESENT. Teena Clifton City Manager
William Kinley City Attorney
Jack Davidson President, RHCA Board of Directors
Dr. David Bray President, Rolling Hills Tennis Club
Joe 011a, President, Caballeros
Residents
PUBLIC HEARING, REAL ESTATE TRANSFER TAX
Councilman Crocker, Finance Officer for the City, explained that
the source of the City's revenue has been property taxes, along with
other miscellaneous taxes, and approximately $5,000 remitted annually
to the City by the County as a portion of a County property transfer
tax, collected upon sale of a property. Currently, the Council is con-
sidering whether to attempt to raise its revenues and lower the tax
rate by imposing a City tax on sales of property, which would be a
percentage of the sales prices Figures have been developed using sales
prices during the past year, and they indicate that a 1/4 of 1% transfer
tax would raise $25,000 in revenues Using a projected 82e,� tax rate,
adoption of a 1% transfer tax would lower the City's tax rate to 7206
with 9a4� coming from a transfer taxa If the transfer tax were set at
1/2 of 1%, the basic tax rate would drop to 63� and 19G would come from
the transfer tax; 3/4 of 1% would be 53(,% basic tax and approximately
28(,,� transfer tax; 1% would be 44� basic tax and 38� transfer tax.
I
Because there are arguments on both sides of the question, Council-
man Crocker asked the Mayor to ask members of the Council to comment.
Councilman Heinsheimer°said that over the past few years the transfer
of property has been at a fairly constant rate, and because the increased
assessments impose a burden on people who have lived in the City for many
years and do not anticipate selling their homes, he suggested that the
Council consider a 1% transfer tax, which would make a significant im-
pact on property tax rate, but would have an insignificant effect on
the sale of a home, and which would generate 35-40% of the City's revenue.
Further, Councilman Heinsheimer said the Council should keep in mind that
a 10� difference in tax rate has an impact of $26,000 on the City's revenue.
Councilwoman Swanson said she had mixed feelings on the matter.
Because the City is on a "pay as you go" basis, with most facilities
already paid for, and in view of the additional $33,000 which will be
available to the City next year after purchase of the Maintenance Build-
ing from the Association is completed, Councilwoman Swanson said she does
not feel that there is a need to raise additional revenue through a real
estate transfer tax, and further, she said it could be a burden on per-
sons who are forced to sell their home because of inability to pay the
taxes, even if they are reduced, or who must move because of a transfer,
or personal necessity as a result of illness or death.° She said she
would be opposed to such a tax at this time.
June 23, 1976
Councilman Pernell said he had received several telephone calls
on the matter, and had discussions with long-time residents. There
has been concern expressed about the impact on residents who wish to
sell their homes after many years in the City, and further, concern
that the Council might act hastily, without due consideration of the
full impact of such a tax. He said that it is the Council's responsi-
bility to explore and fully consider any areas which could provide re-
lief to the property tax, and he suggested that if all factors are
positive and the Council does decide to adopt such a tax, consideration
could be given to a graduated scale to be applied to residents who have
lived in the City for a number of years.
Councilman Crocker said it is important to find an equitable
method of application of such a tax, and he agreed with Councilwoman
Swanson that in many cases people move because of personal necessity
as well as for financial reasons and job transfers, and if a resident
has lived in the City for a short time and is forced to move because of
such personal circumstances, it would not be equitable to grant relief
to persons who have made the decision to move after having lived in
the community for a long time, while taxing others who are forced to
move due to other circumstances. Further, although the City is limited
by law to a tax rate of $1000, as grants such as revenue sharing and
CETA cease in the future and the cost of services continues to escalate,
it may be necessary for the Council to look for other sources of revenue,
and 'uch a tax may be more helpful at that time. Finally, he agreed
with Councilwoman Swanson that it may not be fair to raise money to
ease the financial burden of people who are going to remain in the City
by taxing people who are leaving the community. In a year when real
estate loans are difficult to obtain, depending on 35-40% of the City's
revenue from a transfer tax could be risky, since the City's budget
could be adversely affected by lack of sales of real estate, Councilman
Crocker said.
Mayor Rose asked the City Attorney to comment on whether a tax
levied on persons who are selling their property and leaving the com-
munity could be considered discrimination, and Mr. Kinley said it could
not, since all sales would be treated equally if all people who sell
are subject to the same formula, Mr. Kinley advised that in a tax court
case, the Internal Revenue Service has ruled that such transfer taxes
are not deductible from income tax, Mr. Kinley advised. Mayor Rose
said he thinks the Council should try the tax for a few years, although
he would not be willing to go as high as 1%. Adopting a 1/2 of 1% tax
would leave enough flexibility for future increases if needed, the Mayor
said, and Councilman Heinsheimer said he would agree to 1/2 of 1%, since
in the event that real estate was not transferred at the expected rate,
there would be enough flexibility to increase the transfer tax if needed.
A letter dated .Tune 21, 1976 from Dr. Paul Saffo, 1 Crest Road East,
stating that he wished to go on record as being in favor of the transfer
tax was read into the record,
Councilwoman Swanson said that although the Newsletter advised the
community that the transfer tax would be an agenda item for the Council
meeting, she felt that the residents did not receive sufficient inform-
ation on the importance and impact of the Council's consideration.
Councilwoman Swanson read the notice which was in the Newsletter.
Mayor Rose opened the Public Hearing on the tax, and invited
discussion by residents in attendance. Mr. Joe 011a, 41 Crest Road
West, asked whether a real estate transfer tax would have any effect
on the County tax, and was advised that it would not, as far as assessed
valuation and County tax rate; only that portion of the tax collected by
the County for the City would be reduced. Mr. To Jo Dykzeul, 17 Cabal-
leros Road, said he has lived in Rolling Hills for 18 years, and is
opposed to such a taxa He asked that residents be given an opportunity
to vote on the matter.
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June 23, 1976
Mr. Edward Tyle, 36 Portuguese Bend Road, said capital gain and
tax deductions in connection with sale of property should be considered
very carefully, and people should realize that it is possible to defer,
but not evade paying taxes. Further, in answer to Mayor Rose's comment
that the Council could try the tax for a year or two, Mr. Lyle urged
that it not be adopted on a trial and error basis, but if adopted, it
should be done after due consideration by the Council. Mr. Lyle said
that at this time he is neither in favor of nor opposed to the tax.
Councilman Crocker said said capital gain is not a major problem,
since Cher is no gain when the money is re -invested in property of
greater value, and there are rules which apply to persons over 62 years
of age. Councilman Heinsheimer said he would recommend that if a
transfer tax is adopted, a limit of $1.00 total tax rate, consisting
of the combined City tax rate and the proposed real estate transfer
tax, should be imposed by ordinance as a safeguard against continual
increases in the transfer tax, and to insure that the new tax resulted
in easing the burden of property taxes by raising a portion of the
revenue currently received, rather than generate additional revenue.
It is the Council's intent to change the source of the money collected
rather than the amount, he said.
Mr. John Gandzey, 16 Wideloop, said he would be in favor of a
real estate transfer tax, since it would eventually be levied on all
who sold their homes, and would continue to generate increase revenue
as sales prices of property increase,
Councilman Crocker asked how the tax would be collected, and the
City Attorney said it would be done by the County, and would be an
additional transfer tax, since a County transfer tax is currently
collected, and a portion remitted to the City. Councilman Heinsheimer
said the current tax is 505 per $100, and the tax being considered by
the County would be approximately 50� per $100. If adopted, Mr. Kinley
said the County Recorder should be advised that the City has levied a
transfer tax, and be requested to collect the tax.
Mr. Forrest Riegel, 2 Cinchring Road, said that the value of
property in Rolling Hills is increasing approximately 5% annually,
and he considered a 1% transfer tax fair, since it would still permit
a profit on sale of a property. Mrs. Emily Schleissner, 77 Crest Road
East, said the savings realized by the resident in the lowered property
tax would be wiped out by the tax required when the property is even-
tually sold. Mr. Ed Lyle said the tax relief given to senior citizens
is a one-time deduction to people over 65 years of age. He suggested
that the Council get more information before acting on the proposed
tax. Mr. Robert Kerr, 10 Eastfield Drive, said he is in favor of any
decrease in expenditures, and he sees the proposed transfer tax as an
increase, unless the Council limits the combined tax as suggested by
Councilman Heinsheimer. Councilman Crocker said that any Council that
could change the tax rate would have the power to amend the ordinance
to change the combined tax rate.
Mayor Rose thereafter closed the Public Hearing, Councilman
Heinsheimer moved that the Council adopt a 1/2 of 1% real estate
transfer tax, and use the action as a basis for further budget discussions.
Mayor Rose asked Councilman Heinsheimer to accept an amendment to the
motion to state that the combined property tax and real estate transfer
tax must not exceed $1.00, Councilman Heinsheimer said that action
should be taken whether or not a transfer tax is adopted at this time.
Councilman Crocker seconded the motion for purposes of discussion.
Following a discussion of time limits, methods of implementation and
effective date, a motion to adopt a transfer tax to be combined with
property tax., not to exceed a total tax rate of $1000 was carried on
the following roll call vote:
AYES: Councilmembers Crocker, Heinsheimer, Pernell, Rose
NOES: Councilwoman Swanson
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June 23, 1976
The City Attorney was requested to prepare the appropri
June 239 1975
Road, said she has nine utility poles surrounding herhome, and would
like to have them removed, but it is too expensive. Mrs. Mokler said
she does not expect the City to assume any of the expense,
Councilman Crocker recommended that no charitable or civic con-
tribution should be made from City revenues except where the activity
is available to and affects all of the community, or is related to
juvenile or other law enforcement preventive programs. Councilman
Heinsheimer said he agreed with the policy in concept, but felt that
Peninsula -wide activities such as the Peninsula Chamber of Commerce
and 4-H Club were of merit to Rolling Hills, and individual consider-
ation should be given to requests. Councilman Crocker said such con-
tributions could be made from the Miscellaneous Non -Budgeted Expense
fund of $2,000, and a similar amount would be carried in the new budget.
Councilman Heinsheimer, Personnel Officer, said the staff recom-
mendation for an increase in compensation was reviewed with the Asso-
ciation, and the recommendation for a modest increase which limits
the increase in compensation to a cost of living increase will not
materially affect the Budget. Specifics submitted with the recommend-
ation are available, Councilman Heinsheimer said,
With regard to a capital budget for recreation, Councilman
Crocker said the line item Equestrian Facility Maintenance is inap-
propriately listed in the City's budget, as maintenance items are
paid by the Association. He explained that capital improvements are
made by the City and are leased by the Association, which also pays
for maintenance. The Recreation Facilities Fund has been divided into
two funds, one for tennis and one'for equestrian, and the monies were
put into capital trust funds for recreation purposes. The allocation
in the budget should not be shown as unspent funds, Councilman Crocker
said, as the money has been spent by being allocated to the fund, and
it is proposed to put the same amount into the funds for the coming p
year.
Dr. David Bray, 9 Quailridge Road, President of the Tennis Club
advised the Council that the Recreation Questionnaire indicated that
the majority of people who responded are in favor of additional tennis
courts, and he said that last year the Tennis Club added $1,000 to the
Council's $4,000 allocation, and it is their intention to take similar
action this year, with the funds being accrued for capital improvements
of tennis facilities. Dr. Richard Hoffman, 73 Portuguese Bend Road,
said the Tennis program is one of the most successful programs for
residents of all ages, and there is a need for more tennis facilities.
Mrs. Betty Stern, 29 Crest Road East, said she approves of the Council's
approach to the club's request for money by requesting data to substan-
tiate the request for the allocation, since sound financial planning
cannot be accomplished without such background informations For pur-
poses of developing a. budget, Councilman Pernell said he would be in
favor of making an allocation for recreational purposes in the budget,
pending definite information from the Tennis Club and Caballeros.
Mr. .Joe 011a, President of Caballeros, said that Caballeros would
like to up -grade the equestrian facilities, and in an effort to develop
the best plan, Caballeros looked into the feasibility of enlarging
,,and developing the existing Caballeros ring, rather than building another
ring, and it was determiend that such a plan would not be entirely -prac-
tical. However, Mr. 011a said that with the use of satellite rings
throughout the City', some of the needs of equestrians could be satisfied
and the existing ring would be a better ring. He said that the picnic
facilities in the ring area should be developed, and would benefit the
entire community, since many non -riders belong to Caballeros. Existing
water and trees in the area are compatible with such development, if
planting was done to keep the dust down and electricity installed.
Further, Mr. 011a suggested that consideration be given to developing
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June 23, 1976
a centralized recreation area for the community by putting additional
tennis courts in that area. Anticipated capital improvements in 1977
include minimum expense for developing a facility on the site proposed
to be given to the City by Mr. and Mrs. Clifton Hix, A conservative
estimate of financial needs for the next fiscal year is $10,000 Mr. 011a
said, as Caballeros hopes to develop satellite facilities by fencing
some area and also by developing an exercise ring in the Gap area to
relieve some of the pressures on Caballeros ring. Landscaping in the
Gap area would cost about $2,500; relocation of a trail to permit
development and landscaping of the picnic area, build a fire pit and
fence the area would cost approximately $2,500, and would result in
60% more usable area in the picnic area; to re -surface the Caballeros
ring would cost $7,500, and $10,000 would be required to develop satel-
lite rings. Mr. 011a said, all the work possibly would not be taken
care of in the coming year, but he wished to submit a tentative master
plan and request an allocation of $22,500 for projected needs.
Councilman Heinsheimer suggested that an Ad Hoc Committee consisting
of Mayor Rose and representatives of the Tennis Club and Caballeros be
formed to review and develop a five year master plan, and be asked to
report to the Council by October 1 on projected needs, Further, he said
he would recommend that until that is done, an allocation of $14,000
for recreation needs be made in the budgets Mayor Rose said he would be
in favor of raising the allocation to $20,000.
Mr. Forrest Riegel, a member of the Environmental Quality Board,
said the Board is concerned about the quality of life in Rolling Hills
and in preserving the things which contribute to it, He said that many
members of Caballeros are not horse owners, and in the area where he
lives the number of families who own horses has decreased in the past
seven or eight years to 20-25%, although when he moved to Rolling Hills,
approximately 40% of his neighbors owned horses. Three private rings
in which lessons were once given have been lost to the Community through
development or sale of property, and it is no longer possible to buy a
horse or take lessons in Rolling Hills. As it becomes more difficult to
enjoy horses,the community is changing, and Mr. Riegel said ownership
of horses sh6u.,ld be encouraged to preserve the quality of life. Further,
Mr. Riegel said that people who ride horses are vitally interested in
retaining easements for trails, and preservation of easements is essen-
tial in maintaining the character and openness of Rolling Hills. Coun-
cilman Crocker agreed that horses contribute to the openness in the area
and. --he said that properties which have horses in a field or in an en-
closed area on the property do not have the brush problem that proper-
ties without horses have. He said private tennis courts detract from
the rural atmosphere of the City, and facilities should be provided to
remove the pressure for private courts, and said allocations for capital
improvement of recreational facilities should be included in the budget
on a more equitable basis, since both the Tennis Club and Caballeros
have plans for development, and he recommended that $20,000 be budgeted.
Mrs, Betsy Raine, 71 Portuguese Bend Road, said she felt the picnic
area should be developed with natural planting rather than landscaping,
and she wished to be on the committee which decides how Caballeros money
will be spent, since she feels that development of satellite rings could
be done in a more natural manner, also, at lower costo Mrs. Ailsa Lyle
said the young people in Rolling Hills, especially the boys, have active-
ly participated in tennis activities, Mr. Jerry Zinman, Eastfield Drive,
said he didn't think the response to the recreational questionnaire
was conclusive, since only 305 families out of more than 600 responded,
and although some are strongly in favor and some moderately in favor,
forming a majority, a number of people are also opposed to additional
facilities, and 164 families stated that they were in favor of the City's
adoption of a policy to reduce taxes by not spending any amounts on
additional recreational facilities. Mr. Zinman said he would be in
favor of development of a five year plan before additional money is spent
on additional recreational facilities.
June 23, 1976
Councilman Crocker said that the questionnaire was not intended to
be judged on a majority basis, and he considers 305 responses represent-
ative of a good cross section of the community. Further, he said that
an allocation is not an expenditure, but a provision that a certain
amount'of money is appropriated for expenditure if the committee rec-
ommends, subJect-to Council approval for specific expenditures.
Councilman Heinsheimer said he would like a straw vote on his
proposal that an appropriation of funds be made, but that no expenditure
be made until the Committee reports tc the Councils
Mrs. `hockie Leonard said she is in charge of junior tennis, and
there is an acute need for additional facilities. She asked whether
there is a way to finance additional courts other than with City funds,
and she was advised to investigate alternatives for financing, such as
private funding, as part of the study. Dr. Gordon Bernstein, 1 Ringbit
Road West, said that,the survey indicates that the complexion of the
community is changing and that tennis is becoming more popular than
horses, and therefore the statement has been made that horse activities
and ownership must be encouraged. Dr. Bernstein said he doesn't think
it is proper that a stable could be built which can be seen by a neigh-
bor, may be offensive because of odor, and may block ":he view, and such
action would be condoned because it is horse -oriented, while a person
who wishes to build a tennis court is discouraged from doing so because
it is considered out of character with the community,
Councilman Pernell suggested that the recommendations of the com-
mittee consisting of representatives of theTennis Club and Caballeros,
and Mayor Rose, who is City Council liaison with both organizations,
should be presented to the Planning Commission, which is concerned with
land use, for a recommendation to the City Council. Forrest Riegel,
Planning Commission Chairman, agreed.
Councilman Heinsheimer again suggested that $14,000 be allocated
in the 1.976-77 Budget, to be added to funds already accrued on the same
'basis that the allocation was made last year. Mayor Rose said he thought
$20,000 should be allocated, to be divided evenly between both groups,
Other members of the Council agreed and it was so ordered, with the
understanding that none of the money would be spent until the report of
the committee had been received and considered.
RECESS
The meeting was recessed at 11000 P.M. and reconvened at 11°10 P.M.
Councilman Crocker advised that by contractual arrangement with the
Rolling Hills Community Association, the City of Rolling Hills pays 1/4
of the gate costs because of traffic safety, and further, the contract
gives the City a voice in decisions pertaining to the gate system. He
asked Mr. Jack Davidson, President of the Board of Directors, speak
'to the matter.
Mr. Davidson said that Mr. Kin.ley, attorney for both the City and
the Association, advised that it would be preferable for the Community
Association to have complete jurisdiction over the gate system to guar-
antee the private status of the community, but he said, further, that
a partial subsidy by the City would not jeopardize the private status.
Mr. Davidson said that the Board of Directors had hoped to reduce the
Association tax from 80� to 66�., but if the Association assumes full
cost of gate operation the reduction would not be possible, and he
asked that the City's tax rate be reduced to reflect the change, if
they decide not to subsidize gate operation.
Mr. Kinley explained that laws governing cities have changed
since Rolling Hills was incorporated, and the city is now subject to
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June 23, 1976
liberal interpretations of laws which give people outside the area
ingress and egress, but the Association is not bound by the same laws,
therefore he recommended that the Association and City should be kept
separate to preserve the status.
Following discussion of the matter Mayor Rose moved that the Council
not participate in the financial operation of the gates, and that the -
funds previously allocated for gate operation be used to reduce the
City`s tax rate. The motion was seconded by Councilman Crocker and
carried by the following roll call vote:
AYES,. Councilmembers Crocker, Heinsheimer, Pernell, Swanson
Mayor Rose
NOES- None
ABSENT,, None
Councilman Crocker asked the Manager whether extra funds should,
be set aside for enforcement of the new dog ordinance. The Manager
said no, the City should make money under the new agreement,
Councilman Crocker said he is concerned about the City's emergency
action program, and he wished to ask the Council to consider whether a
consulting firm such as Envicom should be hired to assist in the pro-
gram. Mrs, Clifton said she did not think it was necessary, as she
has discussed the matter with the Sheriff, and it is her opinion that
the program developed for the City is adequate. Councilman Crocker
said he wished to include $1,000 for a consultant, which would go into
the miscellaneous fund if not used, Councilwoman Swanson said she would
recommend $2,000 which would be a more realistic figure for services of
a consultant, The Manager reported that the new communications system
will be in operation in mid to late August, Mayor Rose suggested that
$1,000 be included for the Emergency Action Program, to be put into the
General Fund if not used, further, there are miscellaneous funds which
could be used in the event that more money is needed. Councilmembers
agreed,
Councilman Crocker said he feels that the money spent on newspaper
advertising, although small, is an unnecessary expense. Mayor Rose
said it is a good public relations gesture. In a straw vote of the
Council, Councilman Crocker voted against such expenditure, Council -
members Heinsheimer, Pernell, Swanson and Mayor Rose voted in favor
of the allocation- .
Councilman Crocker said there will be approximately a $20,000
increase in the cost of law enforcement, and he asked whether addition-
al funds should be provided for additional services. The Manager re-
ported that when discussions were begun with the Sheriff's Department,
it was on a four -city basis, but Lomita and Rolling Hills Estates are
no longer part of the general discussion, and deployment will be on a
Rolling Hills -Rancho Palos Verdes basis, same as last year. The cost
of five hours of service per day will be about $55,000, seven hours
will be $79,000 approximately. Further, the Manager recommended that
theCity participate in BAT, the Burglary Apprehension Team, at an
additional cost of $6,000 per year, and she said she doesn't consider
additional service beyond the present level is necessary. The Council
agreed to allocate $61,000 for Sheriff's services, including $6,000
for participation in BAT,
A motion to participate in the Burglary Apprehension Team at a
cost not to exceed $7,000 was made by Councilman Heinsheimer,
seconded by Councilman Pernell and carried by the following roll call
vote:
E
1
Pune 23, 1976
AYES- Councilmembers Crocker, Heinsheimer, Pernell, Swanson
Mayor Rose
NOES- None
ABSENT: None
In further discussion of the budget, Councilman Crocker asked that
$10,000 allocated for Litigation be removed, since the funds were not
spent during the past year, and there is money in the Reserve Fund should
the need arise. With regard to $500 for mapping, Councilman Crocker
asked that a map of the Clay be put on the wall of the Council Chamber.
The Manager was directed to preceed with the project as soon as possible.
The Mayor directed that Tree Trimming be moved to another location
in the budget, preferably under Special Projects. Councilman Heinshei®
mer asked that $2,000 be included for the tree watering project, and
suggested that it be labeled Vegetation Preservation.
ADJOURNMENT
The meeting was adjourned at 11,-50 PoM.
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