People whose entire property and lives were either destroyed or damaged in the Palisades Fire on January 7 are hoping that there will be some sort of financial relief from the City of Los Angeles. Many are also upside down with mortgages and insufficient insurance.
Palisades residents are also hopeful that the Department of Water and Power (DWP) will underground the power lines in the areas of Palisades that suffered the most damage, the Alphabet Streets and the Via de las Olas Bluffs. Wires in other areas of this town, which are located in the very high fire hazardous zone, are already underground and include the Riviera, the Huntington Palisades, Highlands and Castellammare.
Mayor Karen Bass went to Sacramento to ask for money to bail out Los Angeles.
It is unlikely residents will find relief in either area because the City is suffering financially and is asking for State or Federal Assistance. L.A. City Mayor Karen Bass went to Sacramento on March 24 and requested nearly $2 billion in aid. (See additional story for the monies sought.)
The money in the General Fund is L.A. City’s primary operating fund. The General Fund had a budget of $6.8 billion for unrestricted revenues in the 2023-2024 fiscal year. It expected to receive $7.99 billion for the fiscal year 2024-2025, July 1 to June 30.
Where does General Fund money come from? Property Tax, licenses, permits, fees and fines, sales tax and Los Angeles Department of Water and Power (Power Revenue Transfer).
L.A City Controller Kenneth Mejia released a March 3 revenue forecast click here.
LADWP:
The total DWP contribution to the City’s general fund through EUT and Power Revenue Transfer is estimated to be in the range of $688.1 million to $712.4 million for FY 2024-25.
DWP collects and remits electricity users’ tax (EUT) revenues to the City, which are estimated to be in the range of $464.9 million to $482.4 million for FY 2024-25.
DWP also provides financial support through Power Revenue Transfers, with the estimated range for FY 2024-25 being $223.2 million to $230.0 million.
This explains why L.A. Mayor’s Bass executive order with the title “Help Residents Expedite Rebuilding of More Fire-Resistant Homes” noted under the guise of fire resiliency because of climate threats that anyone building all electric would be put on a fast tract. “Within 30 days LADWP shall review and provide recommendations on its customer incentives programs to add appropriate incentives for all-electric new construction and retrofits for commercial and residential structures.”
Although all electric would supply Mayor Bass more funding, there is a electrical infrastructure problem in the Palisades. The area experiences frequent power outages because of the shortage of electricity. There have been no new power plants built since the 1930s, and the increase in electric cars, have been a strain on the system.
In lieu of adding a station, two Power Pole-top Distribution Stations were built. One was located at the corner of Temescal Canyon road and Sunset (by the high school baseball field and tall pine trees) and a second at Marquez Place and Sunset Boulevard. Power was not shut off during the January 7 fire law suits are questioning if snapped pole and wires could have contributed to the house/church/business fires, which continued into January 8 and 9.
The City cannot afford to lose DWP revenue, so it is doubtful that DWP will insist it use its money to underground facilities.
LICENSE AND FEES:
Bass has said she would waive building licenses and permit fees (except the ones she can’t legally do). There is no evidence that she has done so, yet, because those fees are a big contributor to the general fund. It is also unclear which fees she is unable to waive.
PROPERTY TAX:
Property tax will not be coming from most of the Palisades this year. The average tax rate in Los Angeles County is 0.59%, homes in Pacific Palisades are taxed at a rate of 1.64%.
Palisades has largely been ignored by the City for even the most simple of services, such as street and sidewalk replacement, no police, recreation centers amenities for youth ignored, parkway trees untrimmed and other infrastructure ignored, such as water pipe mains.
In addition, while the full extent of destruction of the fires is still being tabulated, UCLA Anderson Forecasts that the Pacific Palisades and Eaton fire damages are likely to have a long-term impact on the local economy and City’s revenues. Losses from the wildfires are expected to cause a $4.6 billion or 0.48 percent decline in county-level GDP for 2025.
City Administrative Officer Matt Szabo reported a $61 million starting gap for L.A., which will be exacerbated by $315 million in lower-than-anticipated revenue from taxes, $100 million in liability payouts that are expected to increase, $275 million needed to restore the reserve fund, $80 million related to solid waste fees, and $100 million to cover pensions for members of the Los Angeles police and fire departments.
Now the City needs the money that Pacific Palisades has provided all of these years, but the town is gone. L.A. has “killed its cash cow.”
The city didn’t kill its cash cow. It barbecued it for a big three-day beach party for its Fire Department.