Unable to figure out nuts and bolts of SLT’s 10-11 budget
By Kathryn Reed
In two days, a new fiscal year begins in South Lake Tahoe. The multi-million dollar budget approved in August on the eve of then-City Manager Dave Jinkens’ departure is rife with questions.
Lake Tahoe News has been trying to put the pieces together, but the city has been hampering those efforts.
The budget for 2010-11 was approved 5-0 by the City Council on Aug. 3 even though now City Manager Tony O’Rourke wanted to be at the helm when it came before the council. Jinkens at the time told Lake Tahoe News it was important to pass the budget then. Why it was important was not articulated. And without the full budget available, Lake Tahoe News can’t answer the question.
What city staff, aka Finance Director Christine Vuletich, presented to the council is on the website.
What’s missing in these documents is the detail.
The city each year sends the budget to some firm to be bound. This takes months to be done. Lake Tahoe News has asked for the documents in PDF form and not bound form.
To this request, last week Vuletich replied, “We have not forgotten you, but must check with the City Attorney to make sure the work papers you are requesting are public information, that can be provided to you.”
All LTN wanted was the documents that were sent to the printer or backup material that allowed the Finance Department to put the budget together.
On Sept. 27, after LTN asked again, Vuletich confirmed what LTN already new – the documents are for public consumption.
However, the 500-plus pages will not be available until sometime today. LTN will need time to scour them before reporting on the detail. This is assuming they are actually available.
In the documents available to the public and media via the website, LTN was able to come up with 21 questions. They were sent Vuletich, O’Rourke and the five councilmembers on Sept. 27 with a deadline of noon Sept. 28.
Vuletich per an email said, “Regarding the twenty one detailed budget questions you asked (Monday), these will take considerable staff time to research in order to provide answers for you. It is not possible to complete this work by noon (Tuesday). We will do our best to complete this work as soon as possible, and will let you know when it is done.”
The response by this reporter was, “… when it comes to answering the questions, I don’t believe you when you say it will take considerable staff time to answer them. You could not have put the budget together without knowing the answers.
“I’m writing the first budget story (Sept. 28) based on the answers or non-answers to these questions. Subsequent stories will follow once I get through the documents you will be providing.”
No word from Vuletich since then.
O’Rourke weighed-in with a phone call Sept. 27 saying he’d like to talk. Calls to him that evening and on Sept. 28 were not returned.
Lake Tahoe News will print the answers when the city answers all of them. A question LTN has been able to answer is the increase in the redevelopment budget by $1.5 million. It’s the lead paint grant.
In other cities grant income and then expenditures are classified separately and not part of the overall budget. Not in South Lake Tahoe.
Although the below reference to the STR Trust Fund still remains a mystery, LTN has learned several departments in the city have trust funds. These are specified funds the public may donate to for a specific cause that are not part of the general fund.
When Lake Tahoe News receives the detailed budget documents it will be looking at those funds more closely and specifically to see if the $20,000-plus for Linear Park that was given to the city from Core 24 Charities is in a fund like this or anywhere else. (This reporter was a founding member and past vice president of the now defunct nonprofit.)
Here are the questions Lake Tahoe News asked the city. The councilmembers were part of the email. Mayor Kathay Lovell and Mayor Pro Tem Hal Cole make up the finance committee. Neither emailed nor called LTN with a comment.
Unanswered budget questions:
1. Why did the City Council budget go up 15 percent? How much of that $192,541 is for salary and how much for health benefits? And what is the rest for?
2. The City Attorney’s Office in 2009-10 had budgeted revenues of $100,000. Why no revenue this fiscal year? How does this department generate revenue?
3. Why did the vehicle abatement budget increase 144 percent? What specifically is this line item?
4. Is it true there is one less fire captain position in the 2010-11 budget? And is it true the fire chief didn’t know about this reduction until the morning the council voted on the budget in August?
5. Fire prevention costs went up 17 percent? What is the public getting for those $42,721?
6. Fire training and safety budget was decreased by 20 percent. What was cut? Is this prudent?
7. Engineering under Public Works had an increase of 25 percent or more than $181,000. What is this money for? Are these the same people responsible for bids like the Lakeview Commons fiasco?
8. Can the city be doing its share of EIP projects with this kind of cut? Please explain what isn’t getting done with the quarter million dollar cut.
9. Is the 38 percent increase in the TID bottom line related to the TOT increase that went into affect this year?
10. How/why did the Redevelopment and Housing budget increase 58 percent or $1.5 million? Where does that money come from and where will it be spent?
11. The Parking Enterprise category, is that just the Heavenly Village garage? With the numbers indicated, it looks like the projection is for it to lose even more money than this past fiscal year? How was that scenario arrived at?
12. Why are the airport environmental operations increasing 52 percent? And what are “airport environmental operations”?
13. What is AB939? And why did this fund increase 150 percent?
14. What is the $840,000 in the 2009-10 STR Trust Fund? What is that fund?
15. My calculations come to a deficit of $4,972,735, yet the city talks about $3 million taken from reserves to compensate for the 2010-11 deficit. Please explain how you wiped away the other nearly $2 million from the ledger? From the budget documents on the website, revenues for 2010-11 are $66,061,944. Expenses are budgeted at $71,034,670. This creates the earlier mentioned deficit. These numbers, though, don’t tie back to the PowerPoint on the city’s website. It seems like the Capital Improvement Plan Budget is not in the budget documents that are on the website. Please explain the discrepancy.
16. Did the budget get approved without the specifics of the CIP being documented or discussed? The website said the CIP revenue budgeted is $34,524,280, while expenses will be $30,805.295. Is this the surplus, so to speak? Does that mean the CIP has been “robbed” unknowingly by the council, or perhaps knowingly, I’ll let them weigh-in individually.
17. The lack of detail provided in the documents on the website don’t allow for thorough analysis of how the cost savings from one budget year to the next have been made. Details would be nice.
18. Is it possible to get the actual balance sheet? This would show all assets, including fund balances, equipment and reserves. It should also show all debt obligations. This should be in one easy to read document. May I please have it?
19. In regards to using the $500,000 from the Workers’ Comp Reserves during the 2009-10 midyear budget revise, was this legal? Is it prudent?
20. There is also the use of the RDA Loan Transaction for $300,000. The document states, “Principal repayment is a balance sheet transaction, not typically budgeted, but increases fund annually.” This sounds like a slush fund to me. Please explain. And what about the interest on this account? Where is it? And how is it spent?
21. Regarding the TOT delinquencies: How do you account for these potential receivables? Is there a “bad debt” account? Interest is added to delinquent TOT, but where is the interest accrued? Is it included anywhere in revenues?
This is why we need Alice Jones on our new city council. She is an accountant and really pays attention to this. She has no special interests to hide. She is the best candidate for a professional quality young energetic community-minded council!
I agree. Alice Jones has the knowledge and background to be a “quick study” and understand the ins and outs of budgeting on the council. She knows what is legal and what is not.
I believe that most of what you are asking for is public information. However, to expect those answers/explanations in two days when staff has their daily responsibilities, is a pretty quick turn around time. It appears that you asked on the 27th for these to be provided by noon on the 28th. I believe that is an unrealistic request.
Good for you, to formulate the questions. Let’s give them some more time to develop their answers.
Hopefully this budget is the last of the damage Jinkens has done to our City! He always had a pattern of NEVER being able to answer questions directly and always talking in circles! When Councilmen Birdwell and Crawford had enough of that from him, they called for his resignation. That’s why it’s disappointing that they’d approve his budget.
When all the failings of the City kept coming to light both Jinkens and his #1 backer, Councilwoman Lovell, would always point to the “Good fiscal mgt. of the City. W/ a 25% reserve.” How much do you want to bet that reserve isn’t really there and that’s what all this hiding the records from LTN is all about?
Great article, I can hardly wait to read the answers.
Looks like a lot of increases for non-essential things; which does not make sense in a not yet recovered economy.
Following the financial debacle with dishonesty, deception, and lack of transparency in the City of Bell, California, citizens are simply going to have to ask these kinds of questions, demand answers, know better what is going on, review where and how their money is being spent, and hold public officials fully accountable and responsible.
Stonewalling, delay, misleading or confusing accounting, and unreturned or unanswered requests for this kind of information are not acceptable.
Has the city parking garage ever made a profit or at least broken even? I recall the costly consultants telling gullible city officials before being built that it would make a profit or at least break even, even if Highway 50 was shut down.
Good research, Kae. By the way – I hear our town depends on grants. If we could get those city palms facing sideways instead of upwards maybe something better would come along.
Lovell and Mayor Pro Team Hal Cole make up the finance committee. Neither emailed nor called LTN with a comment.
Is this really a surprise,they been nothing but pawns in a crooks games for years.
They are more less taking the 5Th amendment to keep her hubby from bring them a decent meal behind the monkey bars.
No matter the good question, they always have an excuse of the facts.
Step back from the real picture of the condition our city in and you can see all the fairytail pipe dreams that have been burning up tax payers money for years.
How long will the good hard working people of South Shore put up with more excuses?
It’s time for a real REALITY CHECK not pipe-dream projects on paper and wasted money for paid off consultants that were greased to say this will work, bring back the good old days of PROFIT.
When it seems too good to be true, it Usually is.
Congrats KK,this reporting is reminiscent of your good old days as editor of the Tahoe Trib. We should have collaborated on filing a complaint with the FBI and the IRS over the redvelopment Scam. The old good old boys and gal of those days couldn’t face facts. Just like what is going on today.
I have to dig out the file,i do recall Von Klug (?) stating “all the money went to lawyers,you could never get the names of the lawyers. If one takes a wild guess one name will stand out.
PS Who approved that old $1,000,000 city loan???? check out the City Council of yore.
Awesome job, Kae! Suspense and mystery…can’t wait for the surprise ending!
Thank you Kae. I agree Alice Jones with her accounting experience and Angela Swanson with her experience in finding Grants is in the best interest of our city and I believe they would respond to your excellent questions.
So as of yet city manager O’Rourke has not returned your phone call???
This is good stuff – reminiscent of vitally necessary investigative journalism, a lost art these days…
In that vein, interesting you mention that Tony wanted to be in place before the budget was passed, and that one of the commenters was perplexed.
In investigative journalism, those kind of elusive timing issues are ‘de rigeur’, in that it can then become an obvious answer to the ‘perplexed’- it was passed so that individual ‘pet’ issues or projects were preserved – before the new guy gets to town to question anything.
This town must admit to a certain naivete, which actually has a ‘plus’ side: everything is a little closer to the surface, therefore becomes obvious a liitle easier. This of course should make things easier to do something about, but that is not the case: everyone has their own opinion, but no pragmatic way to suggest a solution, if they even bother to suggest one.
Even more important to consider than the questions raised by the financial dealings, are the issues of fiduciary responsibility, which can get obscured by all the focus on money (or not).
When a Council member tries to reassure an enquiry about a troubled bid process by publicly stating (in paraphrase)”Oh, don’t worry, there’s $440,000 in there to cover any contingencies”, that merits a comment.
As this was in response to the “low” bidders possibility of submitting change orders – this becomes a case of the ‘fox guarding the hen house’, especially since the difference between the first(now disputed) bid and the second (now disputing)bid was, as I understand it, $ 450,000.
That’s curious – only $ 10,000 difference between the bid difference and a contingency fund that we are to be reassured by – in awarding a bid that went through 4 iterations to arrive at the correct number. What a honed coincidence . . .
So to make the numbers work is one thing, but to do it in such an awkward way questions everything about the fiduciary responsibility. This is the wrong side of “shrewd”, and should be looked at independently of any project resolution.
While figuring out the “nuts and bolts”, the structure can collapse in the meantime – and seemingly has. . .