SLT putting investment action plan together
By Kathryn Reed
While South Lake Tahoe’s financial viability is precarious, the City Council on Tuesday agreed that investing in recreation must happen if the city is going to be on stable footing.
City Manager Nancy Kerry started a 3½ -hour workshop on June 17 by outlining where the city is today in regards to income/expenses. The city is headed for the red because expenses are outpacing revenues. Much of the drain is from health care costs for current and retired employees.
But pension expenses also add to the problem. PERS – Public Employee Retirement System – costs are expected to increase 7 percent each year. And with PERS recently recalculating fees, South Lake Tahoe must pay an additional $300,000.
The city will need more public-private partnerships like the one for Harrison Avenue in order to make improvements. Photo/LTN
While employees have not gotten a raise in the last five years, retiree benefits keep increasing. PERS puts in a cost of living adjustment no matter the economic situation. In the last five years, retiree payouts have increased by 12 percent. This means California public employee retirees can’t say they are on a fixed income.
South Lake Tahoe has 165 employees, but 800 people receive health benefits. This is because until 2001 dependents could be covered on the health plan of retirees for the rest of their lives. Starting with those hired in 2008 retiree health care was no longer an option.
In a 10-year period from 2009-18 the city forecasts needing $44.3 million to fund health care. If changes are not made, that figure could grow to $60 million or more, according to Kerry, based on health care costs rising and more people entering the program.
“The city can’t grow to $6 million a year or we’ll never fund recreation,” Kerry said. The current annual health care cost is about $4 million.
That $6 million is the same amount of cash the city receives in property taxes each year.
South Lake Tahoe under Kerry’s leadership wiped out a $20 million year liability by mandating qualified retirees join Medicare. This is something that should have been done under any previous city manager.
The city is negotiating with each of its bargaining units to make changes to the benefits plan.
“The system is the problem. Information was not brought to the council about how bad things were getting,” Kerry said.
In the mid-1980s it cost the city $1,200 a year for a family’s health plan. Today it costs $1,500 per month.
It is not known if any other city administrator ever proposed capping the amount of money the city would pay per employee or retiree, but it never happened.
Going forward
Kerry told the council if the city doesn’t continue investing in infrastructure, it will have what it has now – crumbling streets. She said the community needs between $15 million and $20 million each year to be able to compete. This would be a mix of public and private money.
She didn’t hesitate to expound upon Tahoe’s major industry being tourism and the need to have quality amenities.
Overhauling South Tahoe’s pool complex could cost $13.7 million. Photos/LTN file
The city has put in $30 million in infrastructure improvements in the last four years.
Part of Tuesday’s discussion was about what else the city should invest in. The council is open to spending the $1 million in excess reserves on projects. This money is in addition to the city’s 25 percent reserves.
Staff will come back soon with recommendations about how to spend the money. Part is likely to go toward finalizing some planning and design work for projects, some could go toward the bike park in Bijou Community Park, and maybe some for hookups at Campground by the Lake.
Jim Marino, assistant public works director, went over staff recommendations for what should be capital improvement plan priorities. He prefers CIP mean community investment plan.
Upgrading the recreation center at an estimated cost of $13. 7 million and revamping Regan Beach to the tune of $4.2 million top the list. An aquatic center could be built, perhaps a second story, definite energy upgrades would be included to the rec center. At the beach the steel bulkhead would be removed and the building gutted.
While the council agreed to the priorities, there is no money for these endeavors. An outdoor amphitheater also is of interest to the council.
The field at Lake Tahoe Community College needs replacing.
However, the return on investment for all three would likely be rather immediate.
But with definitive goals, then partnerships can be formed and grants sought, as well as money put away for the big projects.
Playing to the recreation theme, the city is saving money from Measure S/R to replace the community ball field at Lake Tahoe Community College. It’s likely to cost $500,000. Marino said at 9-years-old the field has reached its life expectancy.
Replacing it, he said, “directly supports sports tourism, which I believe is underleveraged.”
The council collectively agreed the community deserves more action and less talk.
When it comes to figuring out how to come up with more money to invest in the community, the council agreed to form a community task force that will be a partnership with other stakeholders – which includes agencies, government entities, residents and business owners – who want to work on ways to bring investors to town.
Of the seven people who spoke at the meeting, most agreed the city needs to invest in itself, with some saying go after little things, others saying shoot for the moon. Of the 21 letters, nearly all lobbied on behalf of the bike park.
The bike park advocates have $350,000 in cash and in-kind donations, with $100,000 more needed to complete the project. It is in the planning stages and could come to the council later this summer.
But it was also pointed out that residents would be asked what they are willing to do when it comes to investing in the community because the city can’t do it alone.
Blah Blah Blah same old story.
stop the Marvelous Makeover and wasting the money that we have.
I think this is where a lot of people are stuck. They are willing to pay for improvements for our city, but are in total disagreement with the PERS taxpayer funded early retirement and healthcare plan. If you ask the citizens to do more, while that program is in place, many will balk.
Nobody has a problem with government employees funding their own program with a matching contribution along the way from the city, but making the citizens guarantee a set amount, this unfairly straps a city forever, and is virtually unheard of in the private sector.
I don’t blame the retirees, I’d be totally playing my benefits out if they were offered to me. The cities or the state need to phase out this program. It will still be hard to take care of the existing retirees for 40+ years to come.
Finish fixing the crumbling sidewalks all the way down to the Y, before taking on anymore bigger projects, having a beautifully remodeled rec center hidden a block off the main drag, does nothing for the first impression drive through town. The bad sections look totally derelict, I would expect to see this in a seriously impoverished city, one I maybe shouldn’t leave my car to explore.
careabout the 50 is a caltrans issue. in the meeting there was an update about it. The section from Motel 6 to Trout creek it will be done in 2017, from the Y to motel 6 does not have funding yet so we dont know when that will be done. But the city is suggesting that it is a ADA issue and there may be funds from another state department budget for this
Kae, Good reporting on “SLT putting investment action plan together”. I wish I had some solutions to the city’s quandry. Lots of projects and not enough money to pay for them. I was happy to hear the city is looking into an outdoor amphitheater. That’s long overdue!
Should we increase the TOT rate? I know the lodging association would balk at that idea. More public events that the city can profit from? At least we reduced the cost of running the airport and it sounds like Ms. Kerry and the council are looking into other ways to reduce spending.
Our wages are stagnant and the cost of living keeps going up, so where’s the money going to come from?
Our infrastructure is badly in need of repair and the longer we delay it the worse it gets.
Problems,problems,problems! I’ll go pull some weeds and think about it.OLS
Mr. Marino says, (the ball field) “directly supports sports tourism, which I believe is underleveraged. . .”
This town might also notice that this “new” emphasis on ‘recreation & sports’ as a godsend to our financial woes is grossly undermarketed, another, more important ‘underleverage’ – who are we building more & more facilities for ?
Spend a Friday or Saturday evening at Heavenly Village, the only truly inhabited T.O.T. providers. . .huge crowds all enjoying a beer, a meal, a pizza (not to be confused with a meal), miniature golf, music – but none leaving the confines of the Village. . .some visitors make it as far as the signal light at Pioneer & 50, then turn around & go back…not seeking any adventure at all. . .
Families are ‘reuniting’ there, and then retiring back to their room to ‘watch a movie’, not exploring the town. . .either the message is lost or not being expressed. . .needing a major overhaul of any message Tahoe thinks it has, that they’re ‘not really buying’. . .
Tahoe is being visited in name only. . . so much for vitality. . .
We need more than a degree by degree increase in temperature in the Valleys to get people to head here, as mere relief from the heat. . . will be interesting to see how Heavenly draws them up the Gondola (like a straw !) to spend hundreds on zip lines, etc. . .
Does it bother anyone else but me that this city of plus or minus 25,000 people, is in so much trouble, and has been managed so poorly that it cannot do anything by itself on ordinary city income , and needs to beg private participaton to not stay even?
What significant private money is going to be dumb enough to spend seriously to bolster the city? The Harrison Ave project is so small as to be about insignificant in the needs going forward. Significant private money, even when the economy was better has not worked…AKA the hole and the misguided convention center proposal.
Recreation is not an absolutely sure thing. Weather, the basic economy situation which is stressing naarly all discretionary income for potential tourists.
Before spending 13 million on the rec center, would it not be a good idea to understand how much the participation is significantly from out of Tahoe tourists?
The ampitheater seems to be a project that might stand the best chance of making money for the city directly. There is a large example of how music/film festivals, celebrations and similar annual or seasonal events have been used by cities themselves to bring in revenue, instead of depending on the spinoff of somebody elses work, like Snow Globe, the Casino programs etc.
Tax the california existing businesses which cater to tourism. Vail/Mariott are not entities that cannot afford to pay their fair share. The TOT is passed on to customers anyhow, and should not be a sacred cow. Has a study been done to determine how SLT fits in the TOT tax rates, compared to othere resort towns? I cannot believe increased tot will run tourists away.
Where is our belief in the huge draw of Lake Tahoe to the masses of tourists on the west coast and other places?
Tahoe Resident, Yes, I agree. REAL grass to replace the LTCC field is the far better alternative to the fake turf in place now.
I played for “The Pirates”, Don Kennedy was coach, on the Little League Field on Rufus Allen in 1963… Real grass back then and it still looks great all these years later!!!
Real Grass!!! Take care, second baseman, OLS
The article in Lake Tahoe New on 6-18-14 is, as usual, misleading to put it mildly and I would like the public to hear the truth.
Health Insurance
Retirees who turn 65 do and ALWAYS were required to join and personally pay for Medicare Parts A and B. The City’s plan then became secondary to Medicare and the City’s plan only paid 80% of the 20% Medicare did not pay.
This past January the City shifted all retirees 65 and older to Medicare supplement plans and discontinued Health coverage for these retirees under the City’s plan. Therefore the City is currently not paying one dime in Medical claims for retirees 65 and older.
The City is paying their portion of the Medicare supplemental plan’s monthly premium as agreed to in the retirees Memorandum of Understanding (employment agreement) that was in place when the retiree retired. What percentage the City pays of the premium is based upon years of service with the City. You have to work 25 years for the City in order to get the premium paid at 100% by the City. Which, by the way, currently isn’t close to the $1,500 stated in the article even at 100% premium paid by the City? The mostly costly plan is about half that.
Yes this benefit of the City paying a percentage of the monthly Health Ins. premiums was agreed to years ago between the different employee groups ( Fire, Police, Public Works, General) and Management, including the City Council was given this same benefit. It was agreed to with the employee groups because the City didn’t have money for raises for years and years and this was something the City could give that wouldn’t cost them for years to come. But the City never funding this liability and in fact when they did have surplus in the Health Ins. reserve they robbed it to balance the General Budget along with many other tactics too involved to go into.
City discontinued giving this benefit several years ago to new hires and now there are very few City employees still working that have this. Last year it was said that getting the 65 and older retirees off the plan would save thousands and thousands what happened to those savings????
PERS
Just for the public’s information, the City contracts with PERS for the level of retirement pay, not the employees. Non-safety employees (not Fire or Police) that retired 10 + years ago get an average of somewhere between $1,000 and $2,000 a month in retirement income. Yes we get a 2% raise every year but 2% on $2,000 is $40 a month. What City employee is living on that?
CITY STOP BLAMING ALL YOUR BUDGET PROBLEMS ON RETIREES. What about looking at your current spending and salary levels and try to be more honest to the public about what really is the truth. The retirees appreciate the benefits we have but most of us are just getting by like everyone else.
Thomas Fay
OLS and Gary Bowen: Not all people staying at the Heavenly Village pay TOT. EVERYONE whose timeshare equity is located somewhere other than a Heavenly Village APN should have to pay TOT…they do not.
When they trade their time from another property to cover the basic room cost they should still have to pay TOT.
Was this another deal made by the City.
Who knows the real story???
There’s lots of TOT which isn’t being collected and could help the city.
Tahoeadvocate, we can thank the McCarthy family (Stardust Lodge) and their campaign against collection of TOT from timeshare units about six+ years ago when it was a city ballot issue.
I believe that SLT’s renaissance will really begin once the stupid, cheap, greedy, and ambivalent become outnumbered by voting transplants that have brains, want a better community, and are willing to pay for it. This town will then become about quality and a cause greater than self. And it will come because nothing ever stays the same.
Biggerpicture, I’d like to research what actually happened. Are you saying the voters passed a measure which exempted the Heavenly Village from paying TOT on some non-owners? Do you remember what year or the identification of the Measure?
It was a measure for A TOT on any timeshare property in town that was voted down. Sometime between ’05 and ’08 if memory serves.
I’m fired up now!! Yes, make the timeshare owners/guests/traders, whatever, pay TOT’s!! This would greatly add to our city coffers!
Now, new idea: Remember the land given to the city on Al Tahoe Blvd by Marjorie Springmeyer for the Lake Tahoe Wildlife care center?
Just accross the road, this piece of property would be the PERFECT PLACE for an amphitheater like the one in Reno-It is called the Robert Z. Hawkins Amphitheater,at the Bartley Regional Park, which I believe is CITY OWNED. Do the research! It is one gorgeous place!
Now, back to the property donated by Marjorie…this piece of land is between Al Tahoe blvd. and Black Bart, for what I have in mind for an amphitheater. I do not know the acreage, but heck, it has already been logged, and there are no close homes w/people to complain if Snow Globe is there. Personally I don’t care for that thumpthumpthump stuff, but there are LOTS of musicians out there that would LOVE to come to So. Shore!Robert Earl Keen comes to mind, and there are many, many artists that could be booked!!! Please hire locally and stop hiring consultants! Talking big money for our local economy here….CatLapper
If a timeshare owner is not paying TOT, it’s because they are already paying property tax. They’re being taxed as an owner, not a transient!
And property tax generates more revenue, but the bulk of it goes to the State & County, not the City.
Fine, make the timeshare owners pay TOT. But then don’t charge them property tax. Talk to the State & County about it.
But if the City comes up with a specific plan, again a specific plan, to do certain things, and a good explanation why current taxes & fees, which have been raised over time, can’t cover it, I’m game for a proposal.
But if the City needs money, I’d also want an explanation on why the City did not maximize revenue opportunities at the Commons, when it DID NOT lease out concessions to the highest bidders!
1) Nobody should have to pay TOT and property taxes. If you own a time share, you pay property taxes.
2) Read the story. No amount of revenue is going to solve the problem facing the city. They have to fix post retirement benefits. Until that is done the rest of this is urinating in the wind.
Bigger, It was a parcel tax that is legal but the timeshare people stopped it. The tax was for schools, I think.
Cut the health care anchor loose and lighten the load. There is an awful amount of fat on this payroll.
Let Tahoe become a city again with money to spend for job creation for our residents who pay taxes and a real job training center,apprenticeship programs. Think beyond making more revenue to pay for the healthcare for the few. And darnit -incentivise to hire locals !
http://transparentcalifornia.com/salaries/south-lake-tahoe/?page=13&s=base
Bigger, It was a parcel tax for the schools and it was legal but the timeshare people had the $$$ to defeat it.
Lou, you are correct and I respectfully stand corrected.
Parker, et all, no one is saying timeshare owners that are using their own timeshare that they own in Tahoe should pay TOT, rather what they are suggesting is for people that don’t own a timeshare in Tahoe but trade their weeks or points to stay at a timeshare here, like say you are staying in Timber Lodge and you don’t own a fractional interest in Timber Lodge, you should pay a TOT.
Catlapper I may be wrong but Mrs Springmeyer did not donate the land to the city rather she leased it to the Wild Life Center with a option to purchase(I think it was leased rather than selling it now is because of estate tax planning)
But do timeshare properties pay a TOT when selling unused units on a night to night basis to folks off the street in the manner of a hotel?
I understand reloman! Just saying, if you’d read it, it’s one or the other. Some people, some, if you read their comments, don’t seemingly understand. They do apparently want to collect TOT on top of property tax.
The parcel tax proposed by the school district treated each time share week as a separate property and would have taxed each week the same as a single family home for the whole year! Yes Ed McCarthy (Stardust and Americana) opposed this because one time share room would be taxed the same as 52 houses! It was obviously a flawed proposal and needed to be defeated.
Dave, You are correct but a parcel tax for fire protection, which is how it’s done, is ok? This is also unfair cuz Heavenly And Raleys and others pay the same as a homeowner would.
Tony O’Rourke eliminated most of the Recreation side of Parks & Recreation. Now Recreation is vital? It was before TO and the high upper management salaries. The city gave it self bonuses and upped salaries of staff already making great money. Just stating.
Tony O’Rourke was a thug, and likely still is, wherever that might be. If he did nothing else for the City, he exposed the ignorance of the politicians who chose him as their leader and personal representative.
He’s gone. They’re not.
Copper i do believe that Tony was chosen before any of the current council members were elected. but i could be wrong