South Tahoe may layoff 2 dozen to close $5.2 mil. deficit
Publisher’s note: This is the first of two stories about South Lake Tahoe’s fiscal situation.
By Kathryn Reed
South Lake Tahoe has 43 days to figure out how to close a $5.2 million budget deficit. That’s the start of the next fiscal – Oct. 1. The reality is the deadline is 25 days from now because the City Council is expected to approve the 2011-12 budget Sept. 13.
What seems to be a constantly increasing ledger of red has to do with the potential loss of $1.3 million a year depending on the outcome with the state regarding redevelopment agencies, property taxes and the associated income from this source like vehicle license fees continuing to drop below expectations, and the bulk of the bargaining units not making concessions to their pension and health care benefits as hoped and budgeted for in the five-year financial plan approved earlier this year.
As a tourist destination, South Lake Tahoe’s economy is expected to recover more slowly than other regions. While economists argue whether the nation is about to enter another recession, many locals don’t believe the Lake Tahoe Basin ever emerged from the one that began three years ago.
The South Shore is in a worse state than the nation as a whole. Unemployment is near 17 percent, the value of single-family residences has declined by 35 percent since 2006, about 40 percent of the houses on the market are in foreclosure, and hotel occupancy is at 23 percent.
Considering property and hotel taxes are two of the three largest revenue sources for South Lake Tahoe, the above paragraph points to two of the reasons why the general fund is not healthy.
With sixty-seven cents of every dollar in the general fund going toward employee salaries and benefits, this is another large component of what is hurting the city’s financial health.
Looking at city figures, some of which are provided in the Aug. 23 staff report, the combined property tax, transient occupancy tax and sales tax from 2008-09 compared to the next fiscal year has dropped by 3 percent. Those are the three main revenue sources for South Lake Tahoe.
And even though the city’s workforce has decreased by 42 positions or 17 percent since fiscal year 2009, the employees are still the biggest drain on the general fund. But that is the case for most organizations and is not unique to South Lake Tahoe.
On the Aug. 23 City Council agenda is the five-year financial plan’s quarterly update. While the staff report by Finance Director Christine Vuletich says, “The City’s General Fund revenues are estimated to grow slowly, at approximately 1.5 percent annually over the next five years,” it doesn’t mention the nearly two dozen employees who are likely to add to the 16.7 percent unemployment rate when they are terminated next month if city employees don’t make concessions.
Of the city’s seven bargaining units, only the fire association has come to the table, with the intent of agreeing to the concessions asked for by the city. This also ensures their jobs are intact.
It has been this administration and council’s philosophy that frontline staff should have their jobs preserved while middle management positions are flattened.
That scenario is one that is being playing out across the country – though mostly in the private sector.
The general services group is the only bargaining unit that must negotiate this year because its contract is up at the end of September. But they only started negotiating in the last couple weeks after having become part of the Teamsters.
Aug. 23 is only the second time this year that in closed the council will have discussed labor negotiations. That is not because the council has not wanted to move forward, but because the employees have been dragging their feet.
This council has made it known it will not dip into reserves to make ends meet – which is what employees are used to.
What is being asked of employees is for them to pay their share of their pension costs as well as part of their health care expenses.
Even if employees were to agree to the proposals by the city that would save $1.5 million through pension and health care changes, layoffs would be necessary because of the ever-increasing budget deficit.
It has been known for months if the employee groups don’t help defray costs – $1 million a year in savings if they pay their PERS and $500,000 with health care changes – jobs will be lost.
Of the nearly two-dozen positions that may be axed, three are definitely going away, according to O’Rourke. Those are the division chiefs in the fire department. The three are in an associatin by themselves and are technically at impasse with the city.
Sources have told Lake Tahoe News the nine captains will be asked to do more, and that eliminating the three division chiefs will be part of the budget plan the council will vote on next month no matter what.
Other jobs going away are the captain’s position in the police department when Martin Hewlett retires early next year. The department will run with five sergeants instead of seven.
The police chief for the next year is also the fire chief.
Who else will be in the unemployment line remains to be seen. It’s still possible through collective bargaining jobs will be saved.
At several council meetings the topic of privatization of entities besides the ice rink has been broached. If that goes forward, positions could be eliminated that way.
Another issue on the table, according to employee groups, is the elimination of incentive pay.
“Educational degrees and state certification programs were the largest factors for the incentive programs so that the PD would be made up of seasoned and well trained cops and full of rookies. I would suspect that public works had similar things to strive for such as master mechanics or other technical degrees an employee could secure and then be paid for their experience gained,” a former police officer said in an email obtained by Lake Tahoe News.
It is not known how much this would save the city if this were to be enacted.
The Progressive Liberal Government at all levels has betrayed its citizens.
There is no legitamate reason to have unions for government employees. NONE
The destruction it has brought on the country will take decades to undue.
Going forward CA, El Dorado County and the City of SLT all continue to decline.
If you understand what has been done to you as citizens in these employee contracts you know it is time to leave CA and let the failed liberal state, fail.
Liberalism Kills – CA is dead.
GBA
California – Dead State Crawlin
It is time to combine duplicitous functions and positions of the city and county. Time to curtail the massive, inefficient, and unnecessary redundancy.
Do public employee unions really believe the golden goose is alive and healthy? After years of raiding the public treasury their time of reckoning is here.
Fat salaries, fat retirements, getting to retire at 50 or 55 has left these selfish pigs thinking they are royalty.
The rest of the working class can just eat cake while the pub. emp. suffer. Oh yeah.
Give me a break.
I’m more worried about the $5,000,000.00 bond thing that is going on. Five million in bonds every year for five years…..what is the total cost of pay back and can the citizens afford to pay it back without greatly increased taxes? Why isn’t this on a ballot? Why does the City Counsel have authority to rack up this kind of debt? The town can be taken over for dirt cheap by an enterprising investor if we default. Think again.
is anyone else sick and tired of Pubworks TV and his dribble. He needs to get a life and loose his rhetoric. If he put just a little effort into resolving problems instead of pointing fingers maybe he would have a new opinion, but I doubt it. Remember when you point fingers there are three pointing right back at you!!!
It seems to me that while the City Mgr is firing all of the employees that are doing the work, while he sits back collecting a $200,000 dollar a year salary plus benefits is a little one sided, Why not start with the highest paid and work down ?
I love the attitude of the upper Management.
FRONT LINE STAFF ARE THE PEOPLE WHO ARE OUT THERE ON THE STREETS, NOT THE CITY MGR. AND HIS STAFF THAT SIT AROUND FINDING WAYS TO DESTROY THE CITY.
For instance The Whole in the ground, Closed all those businesses in the Stateline area that were paying TAXES,and T.O.T. for a convention center that is not needed in South Lake Tahoe.How many millions of dollars have been lost because of a lack of leadership in the Council? Paying an outside party write the specks for a new Snow Blower for the Air Port? When we have well qualified Mechanics that have been writing the specks for Snow Removal Equipment for over 35 years?
Wake up people, This City Mgr. and Council are going to destroy this City and you are going to sit back and watch while they do it.
I keep reading about budget cuts but nothing in regards to ways of raising income for the city. One suggestion is to increase our Vacation Home Rental (VHR) permit fees from $144 to $250. This alone would bring in an additional $130,000 annually. I also believe the City is losing money from VHRs and Motels who don’t pay their fair share of TOTs. A better plan to watchdog VHRs and Motels should be re-analyzed. Further, I believe the City should better enforce the VHRs who we receive constant noise complaints and get those VHR permits pulled. It would make better use of our Police Dept. to alleviate VHRs who drain our time with constant complaints from our neighbors. Let’s get creative!
It appears that a few more people should walk in another’s shoes for a bit. What would you require in the form of pay and benefits to take Tony O’Rourke’s job? Any takers for minimum wage?
Unions are their own worst enemy, but so are we all when we degenerate into name calling and talking point rhetoric.
Robert, I agree. We never seem to talk about how to raise revenue. Why isn’t that on the agenda as well?
What sence does it make to have one union with only 3 members?
Kelley Pedigo,
Here is some dribble for you…
I’ve been involved with working to “solve the problem” of liberalism for decades and one of the things I have learned along the way is that it’s the people that say “don’t point fingers” are the ones that should NOT BE INVOLVED in solving anything.
Simple flawed logic is it not? THINK
How can you solve a problem if you do not point out what it is?
I’ve heard your kind of dribble for decades. Time and time again.
That’s the group think mentality, exactly the mindset of those that got us here.
People interested in solving problems???
Ever heard of the Abilene Paradox? Its “Group Think” research, check it out if you are interested in understanding where a big part of the problem lies.
One thing that the Public may not know is that City employees do not pay into Social Security, therefore are not eligible for Social Benefits,
Those that have worked before the City and are vested in Social Security and retiree from the City under the P.E.R.S. [Public Employees Retirement System} Are penalized 60% of there Social Security, Many Employees do not know this, I found out when I went to draw my Social Security.
to pubworks tv
too afraid to let us know who you are?
bla
bla
bla
your rhetoric is pathetic
kelley pedigo,
Deep void in you – i discuss issues – you call people names – silly girl.
in my view an empty person – from here on talk to the hand.
*How about combining the unincorporated area of El Dorado County with the City of SLT. Would eliminate duplication of services. Would also bring Heavenly into the City limits, think increases revenues!
*Why didn’t the City get a Performance Bond from the developer of the Big Hole?
*If the City doesn’t have any money, why did the City Manager and City Attorney recently receive pay increases?
*Why were Council members Fortier and Grego absent from the City Council Mtg. when the Strategic Plan was voted on? Why not postpone the meeting to when everyone could vote?
*If you characterize this as a “crappy, little, dirty town” why in the world would you want to be the City Manager?
*Why does this town have more shops where you can buy marajuana than shoes?
*How many times are we going to resod the High School football field before someone realizes that grass doesn’t grow very well in the shade?
* How about forming a medical insurance pool for employees of seasonal businesses. If you worked construction, or food service in the summer, then worked in the ski industry in the winter (or any combination of two seasonal jobs)you and your employer could join in a “medical insurance pool” where everyone could maximize their limited resources and provide a better living for our middle class.
*Now that the City Manager has laid off three Batallion Chiefs and the new Police Chief is in charge of Fire, who is going to coordinate our next forest fire that starts behind your home?
Hope the Police Chief has a GPS in his car so he can find your home when it is on fire!
*Why contract-out the operation of the campground and golf course? They make money! Put a portion of the revenues back into improving the facilities, raise the fees and keep them as part of the City! They are “cash cows” for the City and could offset the cost of operating other recreational facilities.
This isn’t rocket science, folks!
*Why doesn’t the City just increase fees like the other “Public” agency in town? STPUD employees get a raise then our fees increase. Funny how that works!
STPUD employees belong to PERS and don’t pay a water bill either! Which is increasing next year,too!
Pub works, put your real name out there. Otherwise your just another blog blow hard.
Leave Cali, or SLT is what maybe you should do.
I learn from these discussions, or at least reminded. Negative slander is easy and not helpful to the discussion.
This goes for all the slt bloggers…who are you?
Check the definition of slander (libel) again.
I don’t see any of it in this particular discussion. And furthermore your content is more important than your anonymity. Using your real name on the internet is risky.
Are there two sides to this story?
While recent actions & comments make me less comfortable with the new City Mgr., everyone has to concede he inherited a bad situation! When the City had some money, they blew it by handing out absurd raises, adding unnecessary staff and incompetently getting mired in lawsuits the City lost!
It can’t even be said that the money was spent on a good purpose, such as our pot hole filled roads.
How the previous City Mgr. could or would boast about the City being fiscally well-managed showed either dishonesty or a lack of grasp of reality?!
And ‘Thiinking in Christmas Valley’, good question about the raises and Yes, we need to finally look at consolidating services with the County!
XLocal finally admits s/he is a former retired city employee and admits they don’t pay a Dime to social security but has the ignorant gall to think he should collect it! We pay for social security dude, and we pay it out of our checks. You don’t pay for your retirement and don’t pay for social security but think you should collect all of it, all of it from us taxpayers. We shouldn’t continue to foot the bills for these folks who refuse to pay anything for all they get. We pay for social security and we don’t even know if we’ll get it. I doubt I’ll get anything if I ever get the chance to retire. Its time for these tax-sucking clowns to try working in the real world.
Holy Crap! The Fire Department is going to crumble with no management.
Another View,
XLocal on their first comment on LTN said that they were retired from the city.
https://www.laketahoenews.net/2011/02/ax-falls-in-s-tahoe-positions-gone-retirements-eminent/#comments
I’m assuming the City Manager’s contract is public information. Look beyond his salary go his BONUS structure. It is likely that he will receive extra compensation solely for CUTS he has made without the corresponding attention to REVENUES that he eliminates. If a City operation is “in the black” (and there actually ARE a few), he stands to PROFIT by outsourcing jobs.
Is this really what we want for our community?
… And what kind of Hooterville town has a fire department run solely by Captains? They are supervisory level public servants doing the best they can under ridiculous circumstances, not managers.
Absurd.
To Another View
I just happen to have worked for 20 years and paid my SOCIAL SECURITY for 20 + years before , then 28 yr for the City and retired.
What I don’t understand is that I paid into it but when it came time to draw on it they took 60% of it. I’m not asking for anything for free, I earned it and I should be able to receive it.
I never drew an unemployment check in my life and took any job I could to provide for my family. Never drew a food stamp or any other type of Government help.
DEAR CONCERNED and anyone else who might care. PLEASE DO NOT WORRY ABOUT THE FIRE DEPARTMENT,ALONG WITH THE CITY MANAGER,CITY ATTORNEY,AND FINANCE MANAGER THEY JUST RECIEVED A COLA ( COST OF LIVING RAISE) TO THOSE WHO DON”T KNOW.WHILE OTHERS WILL BE LAID OFF TO COVER THE SHORT FALL?WHO REALLY,R E A L L Y CARES HERE???
I had heard that the three division chiefs had given up two colas last year and were willing to pay their portion of Retirement this year and the answer was to be layed off without any compensation! Go figure
Good job Tony. NOT! He really should go back to his nice “high priced house” in Colorado. Or so he said at one of his employee meetings recently. But that raise helped pay for his new Infiniti SUV. Way to thumb your nose at everyone being put in the unemployment line.
I hate to say this but the way of Tahoe is catching up to the city. The revenues are only so much and they have to balance a budget. It is pretty much black and white in that matter. i dont think we would want them to start selling the graders and blowers to balance the budget. Maybe sell the airport is an option. But no matter what they do employment costs will forever haunt them. Same thing is going in the private sector hince the high unemployment rates. Between actual payroll, taxes, insurance (both medical and workers comp), retirement packages and all the other cost associated it is a dead end road. Our city manager is doing what he was hired to do, if the city files B/K he has failed. i would not want to be in his possition at this time, these desicions are tough. This is what the private sector went through in 2008. Now they have learned how to be more efficient with less employees. Hopefully our city manager can make a good balance of keeping services available and also take care of the retirees. Going to be one of those things where probably no one will be happy. Just hope the attorneys dont drive the cost up that more has to be cut. Only so many apples in the barrel to feed a lot more people than there are apples. Going to have to share
Employee costs are projected to be 67% of the general fund expenses seems like those apples are going elsewhere than employees
Where else could they be going??
Hey brain surgeons. Selling the airport would result in it reverting back to the original land owner. It’s called a Deed of Trust. And, they’d have to pay back all of the grant $ that’s been paid to the City/Airport. You think the deficit is bad now? How about utilizing the airport for what it could be? Not allowing hangar tenants to leave like a mass extinction of the dinasours. Another great move.
Yes, its sad that people have to be laid off, but was there this much concern over the 100s of casino workers that were laid off over the last couple of years? Hardly. They were paid less, had less in benefits, but still lost their lively hood. Its been a tough decision on all business owners, both private and public. Budgets have to be cut in order to conduct business..a tough call, but one that has to be made.
What? is right about the airport, though he/she could have said it a bit kinder :). No way could we pay back the millions and millions we would have to if the airport closed or was sold!
Mountain people are resilient and tough…we can make it through this and come out better, just watch!
You’re absolutely right 30Yearlocal. my apologies. It makes we want to spit when I see what’s happening to the entire community. Time to find better atmosphere possibly.