Conflicting info clouds South Tahoe ice rink bond sales
By Kathryn Reed
Private operators of the South Lake Tahoe Ice Rink may be frozen out of being able to make a profit any time soon.
With the need to have all agreements finalized in January so the bonds could be converted from non-taxable to taxable by March 1, questions unresolved, and the season of little government work accomplished approaching, the deal is teetering on thin ice.
Conflicting letters delivered to El Dorado County Board of Supervisors is part of the problem. That board at its meeting last week directed the chief administrative officer and auditor to craft a letter to the city for clarification.
While the South Lake Tahoe Recreation Facilities Joint Powers Authority this month agreed to change the designation of the bonds, the three member agencies must do so as well. Those agencies are South Lake Tahoe, El Dorado County and Tahoe Paradise Resort Improvement District.
The city and county on the same day – Dec. 13 – at their respective meetings heard a presentation by the private financial advisor hired by the JPA (Mark Northcross with Northcross-Hill-Ach) and JPA staff member John Upton.
The city wants to convert the bonds to taxable because IRS rules prevent a private entity from benefiting from non-taxable bonds while the bonds are outstanding. The ice rink was paid from Measure S funds, now called Measure R. That South Shore recreation measure will sunset in 2030.
In a letter dated Dec. 6 from Upton to the county it says, “If the refinancing results in greater debt service, the city will be obligated to pay the JPA that difference. Bond counsel will create the necessary agreement and manner for assured collection. … The cash contribution is currently at $415,000.”
In a letter dated Dec. 8 from City Manager Tony O’Rourke to the county it says, “The ice arena operator and TSE [Tahoe Sports Entertainment], will need to bear any cost obligation associated with the refinancing of the Measure S outstanding debt from tax-exempt to taxable.”
The conflicting information about what entity is responsible for the more than $400,000 is what has the county concerned. The board wants this cleared up before it is slated to vote on the refinancing in late January.
After the county meeting, Supervisor Norma Santiago told Lake Tahoe News, “The only motion was that the auditor work with the CAO to write a letter to the city manager asking for clarity on a statement included in this letter.” Then she quoted the conflicting message from O’Rourke.
Santiago added, “As you are well aware, during the course of our discussion at the JPA meeting, the city said that they would be bearing the costs. Obviously, things are changing and this refinancing of the bond to a taxable bond is a ‘moving’ target. Everyone, however, agrees that refinancing the tax-exempt bonds would provide additional savings to the taxpayers that then could be further invested in projects supported by both Measure S and R.”
At the City Council meeting, O’Rourke said, “We have made it crystal clear the JPA won’t pick up the cost or the city.”
Van Oleson and Chris Cefalu, who operate the rink under the business name Tahoe Sports Entertainment, were out of town and unavailable for comment. Despite the uncertainty, TSE is going forward with trying to obtain a beer and wine license.
In other action from the Dec. 13 City Council meeting:
• The council agreed to take $21,613.70 from the General Fund Undesignated Reserves to pay bills for outside legal counsel for the 2010-11 fiscal year. The bulk of that — $14,096 – went to an attorney to deal with labor negotiations.
• Agreements with the remaining city labor groups have been reached so all employees are paying their share of PERS retirement funds.
• The city will put out a request for proposal to hire a firm to monitor vacation home rentals, with the idea it would generate income.
• The council allocated up to $10,000 to be spent on a feasibility study regarding the South Shore Vision Plan.
It is illegal to convert this bond without the approval of the voters, especially if we are going to get stuck with $400,000 in additional expenses. The argument that there will be savings by doing this is the same sad song we’ve heard for everything else the city council has done, and yet everything they touch ends up hemorrhaging money. Raiding the reserve fund for legal costs is also questionable. Allocating $10,000 for yet another feasibility study is wasteful and ill advised when people have lost their jobs. What part of “Get back to Basic Services” does the city council not understand?
After decades of nonstop blunders one after the other, one can only wonder if the city is capable of doing anything right. Many of the same worn out names surface year after year with no explanations for their poor oversight. It is no wonder higher city taxes have been necessary to keep this train on the tracks.
Dissolve the city, eliminate the costly mistakes, unnecessary redundancy, and higher taxes.
Let this little adventure be a lesson to the city regarding their rush to privatize city operations, i.e.- the airport, snow removal or parking enforcement. There are always consequences to using contractors and private companies to do government functions. The motive for contractors is profit and that profit often conflicts with the needs of the public. Perhaps it is time to seriously look at eliminating the City of South Lake Tahoe and going back to a much more simple and efficient El Dorado County government that does not duplicate so many functions.
If you read todays Sacramento Bee you will see that the City of South Lake Tahoe has 40 employees making over
$100,000 per year! Thats 16.8 per every 10,000 residents. Galt a city of the same size has 16 employees making over
$100,000 per year! Thats 6.6 per every
10,000 residents. Placerville has 5 making over $100,000 thats 4.8 per 10,000 residents. With all this high pay they still can’t get it right. Eliminate the City of SLT!
IF YOU LOOK AT STATE CONTROLLERS WEB PAGE S.T.P.U.D. HAS 20 EMPLOYEE,S OVER 100K
Good research Robert! We overpay for low-quality service. And it illustrates the absurdity of our City Govt. crying poor all the time. At least we know where all the road maintenance money goes!
Those $100k jobs are great but the pensions are the bomb!
Robert, first I do not work for the City. I read the same article and you fail to mention the data was from 2009 which is well before the City cutbacks. Research is good, but be accurate. I live in the City and want it to be successful. Being governed from Placerville would be a terrible fate.
The Ice Rink Operators and TSA will have to bear the cost? This sounds like these people will be sueing the city soon. After all the $400,000.00 wasn’t in the lease agreement O’Roarke arranged! This is no little mistake, in the private world heads would roll and pink slips would be handed out. I think it’s time to look at those in the city $100,000.00 club, are they really worth it?
Centurion, Those numbers were from 2009.
Wait until the 2010 & 2011 number appear they will only add to the mess. How can it be successful the way things are going. Look at the money that would be saved if it were county ran!
Scoop, S.T.P.U.D. might have 20 but they also have the county portion of the Tahoe Basin. Thats about 6.6 for every 10,000 residents.
Yeah, while there may or may not be less people in the City Govt. making over 100k since 2009?, it is a fact that some of those making over 100k have received raises since 2009! Talk about absurd!
But here’s where your research may be flawed, Robert: Galt is a beautiful place where people are willing to take less money to live there! Tahoe is such a terrible, ugly place, you have to pay people more to work and live here!!
I believe most of the citys problems are a direct result of the city attorney, Enright. I say get rid of this man. Now! Why the public puts up with this mans incompetence is beyond me. He’s running our city into the ground. Giving the city back to the county is also ridiculous. Clean up the mess here if you want to move forward.
Do any of you out there sometimes think you are living in Alice in Wonderland or that the word psychosis is way underused?
Earl, I understand you – we are surrounded in large part by idiots. Especially the young people of CA who have received a poor education and a socialist indoctrination.
They are sheeples in many ways. Very surprising, but true.
Though the entire country seems to suffer from the malady it is far more prevalent in the young adults in CA.
For me, for now, I moved up towards Seattle and I find a much healthier mindset.
You can’t fix stupid… but you can use it as an example.
First of all to Parker, I grew up outside Galt, Ca. went to H/S there, its not a beautifull place , people have built cheap housing where Farms used to be, and they have just as many and maybe more problems than S.L.T. does my brother works for the city of Galt its a mess. Just another cheaper bredroom community from Sacramento. While Im not happy with what the City Coucil and Mgr are doing, trust me letting the county control us from Placerville would be a freakin nitemare. The Ice Rink has been a loser from Day one. Its the most expensive youth sport there is how many local kids play on the Hockey teams my guess is its a small percetage of the players. For the price they spent to build it buy a zambonie etc, they could have built more fields for the youth and adults to play on. Heck even if Reno/Tahoe ever get the Olympics again there is NO seating that would allow this venue to be used. Another BIG Tahoe boondoogle…
“You can’t fix stupid… but you can use it as an example.”
Pubworks obviously thinks they are not in that group. Stay tuned, this may change.
FYI Mr. Ervin, I was being sarcastic! Not in that I was trying to make a dig at Galt. Just stating how those of us who choose to live in Tahoe, are for the most part willing to make an economic sacrifice to live in this beautiful place. I say for the most part because as Robert’s research points out, those working for our City apparently are not!
And as far as becoming part of the County, I will say, and I believe just about everyone will say, the unincorporated County portion here at the Lake does get higher quality services than those of us in the City do. Or I have yet to meet to someone who’s lived in both sections say that they rate the City’s level of service better. Rather, it’s always the County’s services as superior!
You can’t fix stupid but you can be a never-ending one-trick pony whining reminder of it’s existence.
A very true and timely statement on this particular thread. I THANK YOU SmedleyButler
PublicTV: what is “sheeples”? ,Parker: well said,I’m in total agreement, Smedley: lmao, and LisaD: ditto
Merry Christmas!
Love the snow-less weather
Can’t believe how many want Placerville to control So. Lake Tahoe, maybe you should attend a couple of Supervisor meetings and see how often we are even mentioned. The West Slope could care less about us, they have there own war with Big Money Real Estate trying to take over farms and water rights. And as far as services go I have found during my 33 yrs in So. Tahoe no problems,my streets have always been plowed while friends in Tahoe Paradise and Myers and Christmas Valley are waiting. Police and Fire Response is great. It just seems county residents complain more about the city in reguards to everything. It would be nice if the council was extended to having 2 at large members from the county especially if they owned a business in the City Limits. This isn’t the great place i moved to in 1978 but like all things change happens, from local owned Casino’s and Ski Resorts to Corporate ones. But the worst thing that happened up here was when 2 Republican Gov.’s created the TRPA.. Ronnie Reagans worst legacy…. The City needs to remember we are still a small town do we need or have ever needed a Convention Center No. The days of living off Sacramento handouts are over. The Council needs to sit back and reacess what this town has always been about, Vacations ,summer and winter sports fresh air,Gambling across the state line. Lets start first by replacing our do nothing Congessman and go from there.
Placerville has been.. and always will be… the smelly/stupid armpit of El Dorado County. Hang this.