Opinion: Growing the economy is a necessity
By Nancy Kerry
On June 17, 2014, the City Council held a workshop regarding the city’s five-year financial forecast and the overall economic forecast for the local community. While the forecast has improved, we need to attract substantial capital investment over the next 10 years to grow the economy, meet the community’s needs and fund projects protecting the natural environment.
Like most state and local government agencies, the city’s revenues are dependent upon a thriving local economy and upon the housing market (property taxes) to fund essential public services. Additional services and capital investment require additional revenues. As a result of the Great Recession the city’s revenues dropped sharply in 2008. By 2010, the city’s five-year forecast projected $3 million deficit annually, which would have drained the city’s reserves within a few years and could have driven the city into bankruptcy.
Nancy Kerry
It is July 2014 and that did not happen. The city is solvent, midway through its first balanced budget in more than five years and closed out last year with positive cash flow.
How did such a transformation in the city’s finances occur in a few short years? In 2010, the City Council changed its course and set sail to establish a local government living within its means. To reduce the majority of expenses, the city eliminated 30 percent of its workforce and focused on delivering quality core services to the community. Since 2011, the city has held the line on expenses to the best of its ability, with the exception of skyrocketing pension and health care costs. City employees agreed to changes in health care benefits and reductions in pay ranging from 7 to 9 percent.
Simultaneously, the City Council began heavily investing in streets, roads and infrastructure such as the Harrison Avenue project, local street improvements, Bijou stormwater project, Linear Park and more.
Although these capital investments create a strain on the city’s limited financial resources, the community investment is worth the risk. Locals and visitors alike expect the built environment to more closely mirror Tahoe’s world-class natural environment. Yet much of the built environment lags far behind the pristine natural beauty of Lake Tahoe.
The City Council’s decision in 2010 to change course by significantly reducing expenses while concurrently investing in capital was a risk worth taking. If those difficult decisions during very tough economic times had not been made, Harrison Avenue and other projects would not be under way today.
Capital investment makes a difference. We need $15 million in public and private capital investment for the next 10 to 15 years to construct the improvements necessary to grow the economy and protect the environment. At first thought, setting a goal of $150 million may seem unattainable. However, we are already 20 percent toward that goal in this year alone: Over $32 million in public and private capital is being invested in the community through the Harrison Avenue, the Bijou Project, and Chateau project. Another $5 million to $10 million in private projects are also under construction in the city.
Clearly, we can attract capital investment. What we need is to more adequately welcome and assist those who want to invest their capital in the community. Government must remove regulations impeding redevelopment of antiquated buildings to encourage modernization, which will benefit the environment and the economy. Growing the economy and protecting the environment are not exclusive goals, but there is a delicate balance. We cannot pursue economic development at the expense of the environment and we cannot protect the environment at the cost of suffocating the economy. When one fails, both fail. Government agencies are the primary funding source of environmental projects. In order to fund those projects, the economy must be thriving beyond the revenues needed for essential public services.
Working together we can develop solutions to welcome capital investment, which will raise the top line across all sectors. As revenues increase, investment in the community will provide long-term sustainability for the next generation. Lakeview Commons was originally just an idea advanced through strategic and visionary leadership. When combined with community engagement and capital investment, we now have a wonderful public facility enjoyed by all.
What’s next? How can we attract community investment and retain and support local businesses? Your voice is important to the discussion, as are the ideas of your friends, neighbors, and those from a generation behind you because it’s their future we are planning for and what we invest in, they will inherit.
Nancy Kerry is the city manager of South Lake Tahoe.
Very refreshing op ed by Ms. Kerry.
The solution is glaringly evident – lower regulatory burdens, less taxation and limited government is a time proven formula.
Yes,
I agree with you Ms. Kerry, growing the economy is the solution. I also agree with BitterClinger – the best solution is to get the government out of the way and out of the marketplace.
The government should regulate the markets but limit it’s participation in the markets to the best degree possible. The city should not be involved in the development projects. The City should instead be ensuring a fair and level playing field where the rules and opportunities exist for all.
Government involvement creates crony capitalism. SLT and El Dorado County history is clear evidence of that fact.
Before I hear the arguments… Exceptions do of course exist. Military Defense, border security, space exploration, and public utilities required much more investment than the private sector could coordinate. These are areas where government must lead and participate but it also must adapt to changes. Many public utilities for instance today need less monopolistic protections then they did in the past during the build out stages.
“Government must remove regulations impeding redevelopment of antiquated buildings to encourage modernization, which will benefit the environment and the economy.” “Like most state and local government agencies, the city’s revenues are dependent upon a thriving local economy.” “How can we attract community investment and retain and support local businesses? Your voice is important to the discussion, as are the ideas of your friends, neighbors, and those from a generation behind you because it’s their future we are planning for and what we invest in, they will inherit.”
The balance between government and business is extremely delicate. Oftentimes people think that government is supposed to grow the economy but in actuality most local governments don’t have the resources and they rely on the economy and the success of their local businesses for the revenues they need to provide services and make community improvements. If our City gets the majority of its revenue from property tax, sales tax, and TOT, then two out of those three revenue sources are wholly dependent on what local business operators do in the operation of their enterprises to generate revenue for themselves and ultimately for the City in the forms of sales tax and TOT. As Prop P showed some of our local citizens are against the City charging user fees to generate revenues for maintenance and/or improvements so it falls to our local businesses to maximize their opportunities for making more money for themselves and ultimately for our City.
I agree that capital investment is crucial if this community is to be improved and prosper and think people who continually criticize the City should respond to Ms. Kerry’s invitation to add their voice to a discussion seeking solutions instead of just limiting their actions to critical blogging on this site. Now is YOUR time to make a positive difference.
I hear Salt Lake City is the fastest growing city economy right now…. Maybe South Lake Tahoe could look closely at the formulas used by other cities that have made economic turn-arounds and/or increased their success levels. We don’t have all the elements of a city like Salt Lake City (airport, etc.), but we have the elements of many other smaller cities that have been reinvented and revitalized successfully.
Would be nice if we could attract tech industries, doubtful but nice. We have a minimum wage economy which attracts the kind of retail we can afford: CVS, RiteAid, etc. Let’s not look to a Walgreen for the lot at 50/Ski Run.
We are building retail at Stateline yet the “Y” is like a ghost town – only 5 businesses left at the Outlet shops and they’ll probably leave when their leases expire. Lots of empty shops from the “Y” to Bijou.
“I hear Salt Lake City is the fastest growing city economy right now”. Wonder how much of this is driven by the NSA snoop station that apparently started up last fall. I’m guessing SLC is on a fiber optic freeway of which maybe only 2 exist (probably going east, west)west of the continental divide. SLC most likely has huge bandwidth accessible to both coasts.
To attract capital investment you need assets. A pool of qualified prospective employees, good infrastructure and low property costs, for instance. Do we have any of those? We have a really cool lake and some great scenery. But, do we have the things that attract investment? If not, how would we get them? I’m not convinced that free concerts on the beach is the answer.
Nancy Kerry, Well said! I would suggest building on what we have. Tahoe’s natural beauty and all of our recreation opportunities. I also think we should be offering more for seniors, both locals and visitors alike.
Yikes! I am a senior now! Where did the years go?
OLS
Infrastructure, infrastructure, infrastructure!!! There are so many opportunities to bring young professional families to our area who can telecommute and live anywhere in the world.
For the individuals or families who enjoy outdoor activities, a relatively safe environment, and a quieter, simpler life style, this community has it all.
However, anyone with young children, will always look at the educational opportunities first before re-locating. Yes, we as a community have fortunately endorsed improving our schools infrastructure. But, have we as a community pushed our school district to be a first rate academic environment?
If we were rated as one of the highest achieving academic school districts in the state, families would find a way to move here.
First rate infrastructures and first rate schools would attract the much needed private investment to our area.
Just some food for thought!
Also, quality control seemingly isn’t a trait held in high regard in this country. When the sidewalks around the Y were done a few years ago, about half didn’t drain properly causing a lingering health hazard such as ice puddles. When the artificial sports field at the local college went in, there were some very questionable quality issues too.
It’s great that infrastructure is being evaluated and redone. But let’s not be fooled. Toyota Prius with a MSRP of around $30K is actually the cheapest vehicle to operate in this country. Let’s take a lesson from a company with very, very high quality control and have a better existence.
Rebel….
Infrastructure is required, bandwidth for sure.
Telecommuting is a factor, but all the telecommuters we could imagine WILL NOT create jobs for enough other people who need them. Sure, the telecommuters buy groceries and gasoline etc, but outside of the service economy it won’t help that much. We’ll still be a minimum wage City.
In fact telecommuting is on the wane in major business circles, where the face to face factor is most important.
We need viable middle class jobs for middle class workers, who, even when jobs are available, largely cannot live here due to the costs of living. Light manufacturing for instance, would provide jobs for the less educated. Technology centers, customer service, on-line or telephone would work. The building trades have so few jobs now due to the built-out situation in Tahoe that this once large employment base is idle now.
I understand a significant portion of our teachers and public safety people live in Nevada. I do not know the percentage, but personally know of more than 10.
Gaming and tourism have always been the mainstay of Tahoe’s economy, but Indian Casino’s and the tendency for the Ski resorts etc to focus pretty much on a very wealthy clientele is not creating a middle class economy for Tahoe.
The great blue lake which must be protected at all costs may very well be the larger problem that growing the economy locally must face.
Let us not ignore the fact that the weather itself may well within a short number of years, wipe out ski areas significantly. What next?
We want it all but not willing to look at viable solutions – such as paid parking. Good job voters for taking away that steam of revenue…
Yeah – lets cut more city jobs- that’s the answer -sure—-there goes our professionals off the hill -GREAT IDEA!
I think we need to give Nancy Kerry a Magic Wand – so she can produce miracles so we get it all and not have to worry about paying for it.
If you look at what the community of Bend Oregon has accomplished over the last 2 decades and compare that to South Lake Tahoe you realize what could be happening here.
To a large degree the difference is the mind-set of the people, in Bend there is an entrepreneurial spirit of creation and a population of thinkers, doers and dreamers in the community.
In S. Tahoe the community is better characterized by a government centric mindset where government runs everything. It is illustrated by the anger and frustration because you can’t raise money from parking fees.
Worse yet you have a large class of people that expect business people to step up and contribute and pay the taxes and accept all the risks for the privilege of being here amongst you.
I think it is clear the business minded people, the leaders and visionaries went to Bend.
Although the thought of more hi tech or some other economy sounds great, I”m not sure SLT could ever compete with big cities. We’re a small tourist town, and we have not come close to fully capitalizing on that. We need to continue to focus on rebuilding our city into a town worthy of the beautiful lake it sits on. With a better town comes more high-end tourists who spend lots of money, unlike a lot of the Central Valley/Reno people we get now who stay in cheap hotels. We are moving in the right direction with Lakeview Commons, Harrison Ave., Nevada Beach bike path, etc. We can continue to improve by encouraging the demolition of old, word-down hotels and businesses, and moving toward more walkable, inviting town centers. Nobody is impresssed with SLT when y9ou come in through the Y, and drive down the long US 50 toward Stateline. Whether people know it or not, we all love small, walkable, beautiful town centers, and an SLT like that will bring in rich tourists from around the world and coutry, and can give us a city, and a lake, to be proud of.
CJ McCoy:
What entrepreneurial solutions do you recommend for SLT?
The town of Jackson Wyoming is about the same size as SLT and is a mountain economy as well. The town thrives with arts, restaurants, entertainment and a strong recreation economy. Several daily/weekly newspapers keep locals and visitors informed about all the great things to do there every week. Its remarkably different from SLT and it might be informative to learn more about that. What models they have which would be applicable to our town.
The difference between us and say Jackson, Wyoming or Aspen is they are destination resorts in the literal and figurative sense. We try and create that here but like it or not we’re a resort town on the way to other places by virtue of a US highway running through it. I know it may be argued that Vail falls into that category but the difference is that town was planned and built around the ski resort. “Planned” being the key word. When our town was built planning was non existent in the minds of our areas early residents.
Park City is another example of a moungain town that thrives, but the citizens were willing to invest in it in the form of higher taxes upon themselves.
Neither Jackson nor Bend has the TRPA or the League to Save Lake Tahoe, among other barriers to growth. Here at Tahoe we have SO many Federal, state, county and city agencies that throw up roadblocks to entrepreneurial growth at every turn. And of course, there are also the phony agencies (League to Save LT, Sierra Club. . .) who, when government doesn’t interfere properly, will toss out a law suit to slow growth down.
If government and ‘environmental’ lawyers would get out of people’s way, we’d be able to accomplish a few things.
And with regards to Park City, I’d be curious to see actual numbers to see if residents there pay more real tax than we do here in South Lake Tahoe. The lakeshore here encompasses 2 states and 4 counties, so it’s not easy to compare it to a mountain town that’s in one state and one county. Apples and oranges. How many people actually LIVE in Park City? Not that many.
Gee dog, without the gvmnt agencies and other “phoney” agencies you have singeled out, our lake would look alot like clear lake or lake arrowhead, the public lands that surround this lake, the two states involved and the private interests are all under some form of management and those entities, along with local groups, interests of business, tourism. It would all fall apart if there wasnt some formal management and direction. So go ahead and continue your constant put down of any one or thing you think is so bad about here. I really think you need to be shown the exit door, go live with cj in bend oregon, see how that area does it different. Remember, compareing here, lake tahoe, to bend oregon is compareing apples to oranges. Of course you havnt figured that out yet. This place is special and deserves protection and rules so it dosent end up like clear lake. I bet if you took a vote you would be in the minority of folks wanting this area to not be protected, that requires laws, rules and cooperation. I know you prefer the other path. Too bad for you…
Geeeeez, gofigure, you repeat MY phrase word for word, then say that I haven’t figured it out??
REALLY??
Really!!!! Dog, you are always bashing the agencies and groups that exist here to help protect our unique environment. What I stated is the opposite of your rant. Im glad the federal and state agencies are here, and the “phony agencies” of which I belong to and support. Without the regulations they have established this place and the lake would be trashed. From your statement above you just continued to put down the efforts. But that is what you always do. I wasnt quoting you for your great forward thinking, I was being sarcastic. Big difference in my eyes.
Can someone explain this statement to me:
‘you repeat MY phrase word for word, then say that I haven’t figured it out??’
What gives her ownership of a phrase, and why is that significant?
What is the connection between the phrase and anyone not being able to figure something out?
Hey cosa, I think dog thought I was repeating her above remarks because I believed it was thoughtful, I was pointing out the continual put downs and anti attitude dog poors forth at every turn of the page. Dog didnt get it, go figure…
Too bad the final few comments on this topic reverted to the usual negative rhetoric instead of offering up any positive suggestions that might make a difference. Like Nancy Kerry said: “Your voice is important to the discussion, as are the ideas of your friends, neighbors, and those from a generation behind you because it’s their future we are planning for and what we invest in they will inherit.”
Spouse – 4-mer-usmc
4mer. If you haven’t figured it out by now, Dogula and her ilk have no solutions except one; the dissolution of our government.
Rock, you say that as if it’s a BAD thing.