City tells employees to come up with budget solutions; final meeting slated for Sept. 27

By Li Terrell
To a crowd of about 200, the South Lake Tahoe City Council met to hear the 2011-12 Budget Proposal from its city manager and finance director on Thursday.  There was an obvious tension between the council and members of the public who attended the meeting, though the general sentiment of the council and city manager is that the deficit issues are not their fault, and that employee sacrifice is what is required to balance the budget.

The council did not vote on the proposed budget — but went back to the drawing board to try and find another way to balance the $5.2 million shortfall. More importantly, the city council issued a direct challenge for those in attendance and other citizens to bring their chalk too. The final city council budget meeting will be Tuesday, Sept. 27 at 6pm, just three days short of the state deadline for a balanced budget.

The meeting began about 20 minutes late due to a closed session with bargaining units. Mayor Hal Cole said negotiations would continue but there was no action to report. When comments were opened on non-agenda items, Bob Rockwell gave an impassioned speech for the council to reconsider cuts. Because his comments were out of proper order, he was escorted from the meeting by an officer.

City Manager Tony O'Rourke began the presentation of the Budget Proposal. The text of the proposal was e-mailed to employees on Tuesday after 4pm, and was not shared with the public until that moment. He used several statistics to show that Tahoe’s economy is worse off than the national average. He also reiterated that the city pays 65 cents of every dollar on employees, despite the loss or reduction of 40 positions since 2009.
“Past sacrifice won’t balance the budget of today and the future,” said O’Rourke. “Only a shared sacrifice will.”

Regardless of these downturns and dismal projections, O’Rourke said that it was crucial to improve the city’s infrastructure and roads to the tune of approximately $5 million in capital Improvements.
“We can’t continue to drive on third-world roads and infrastructure,” he said.

Several street employees would address this approach later – saying that improving the streets and hiring temporary snow removal workers was counter-intuitive.

O’Rourke concluded his presentation noting that cuts were necessary given the times, and that like any family, the city has to live within its means.

“This is the medicine we have to take to stay healthy,” O’Rourke said.

City Finance Director Christine Vuletich followed up the detailed portion of the presentation. There were several moments when she was asked to break out or explain certain funds and details of where money was coming from and where it was going.

The assembly of citizens and employees, both current and retired, were collectively vocal.
Several times during his presentation, O’Rourke was challenged by direct comments from the crowd. As he mentioned shared sacrifice, several people called out - challenging O’Rourke to sacrifice his own salary. Others heckled by saying, “Cut from the top!” The tension ensued, especially later in the meeting, when O’Rourke suggested that services could be provided by the private sector. Several audience members audibly booed, hissed, and cursed. Both Council and O'Rourke ignored the outbursts, but were visibly ruffled.

At one point, the room erupted into cheers and applause when Mike Pollock, a retired Street Supervisor, exasperated by the end of his plea, suggested O’Rourke go "back to Colorado." He apologized to O’Rourke privately after the meeting.

Jerry Copeland, representing the Administrative and Confidential Unit, commented on the employees’ general feeling of blame from the city for the financial problems at hand. He also called attention to the rushed nature of the negotiations.

“We are used to having 12 to 18 months to negotiate, he said. “Now we are supposed to do it in weeks.”

Karen Perez, a current Housing and Redevelopment employee on the cutting block, said the city is not taking into account the actual cost of cuts in the long run.  

“Certain programs that will be affected are granted programs at the state and federal level,” she said. “If they stop, then the city could be responsible for paying those grants back.”

Rob Swain, Recreation Supervisor, echoed the sentiment of several before him that Parks and Recreation are an integral part of the community. He noted that he handles more than 130 contracts for recreation per year in events, park rentals and the like.

“There have also been grants that have been lost because the people to do them were laid off,” he added.

He also mentioned that Parks and Recreation recovers 72 percent of its expenditures. He asked the council to consider forming an enterprise with the employees in the department — encouraging and partnering with them to make the department more lucrative.

Rob Stiles of Tahoe Real Estate services spoke to projections in the budget that could be off due to loss of property taxes. He also suggested that the city raise fees on vacation rentals to raise approximately $130,000 in additional revenue.

“There’s ways to do this,” he said to the Council. “You just have to look under the rocks to find the money.”

After the close of public comments, the council had its turn.

City Manager O’Rourke was asked directly by council to address specific questions raised by the public. Regarding delinquent TOT tax, he said most of the properties that haven’t paid are under lien or in court, using The Block as an example. He mentioned the city cannot raise the TOT tax at this time because businesses are squeaking by.

However he was also asked about vacation rental fees that have gone unpaid and unenforced.

“What staff we have, we are pursuing it,” said O’Rourke.

He directly denied receiving a personal raise or bonus for making cuts.
“Contrary to what is said out there in the blogosphere ... I do not get paid for cut positions, nor have I received any bonuses to date.”

However he did admit that certain department heads received raises for taking on more departmental duties —though employees in the trenches have increased duties as well with no pay increases.

Bruce Greco commented that while he was glad that the community showed up and shared ideas with the council, it was too little too late.

“Coming to one meeting isn’t enough,’ Greco added.

Several employees in the back of the room called out that council should have meetings in the evenings for more public attendance.

Greco continued, saying that citizens of South Lake Tahoe should be more active in calling on federal and state entities to stop cutting at the city level. He told citizens that if they wanted to be active and participate in the community, they had to do more than complain.

Angela Swanson said it was very somber and depressing, because she knows many of the people who were in the room.

“In moving forward, though, this city has a responsibility to be balanced,” she said. “I still have to say I am in full support and confidence in the City Manager and Finance Director and what they are suggesting.”

“Nobody wants to do what we have to do,” said Tom Davis.  “But nobody else has showed me the $5 million.”

Mayor Pro Temp Claire Fortier took a moment in her comments to defend O'Rourke, saying it was easy to vilify someone in a place of leadership, but that leadership is exactly what the city has been lacking in the past.
“It’s not my fault; it’s not the city’s fault that we're here,” she added. “I am sorry and I don’t know what else to do. Please, come to us with solutions.”

The motion to reconvene was unanimously passed, and the meeting ended by 10:30pm. The city has less than two weeks to balance its budget. Council is expected to take final action at the Sept. 27 meeting.