More city services on the chopping block; budget meeting Thursday

By Li Terrell
A special meeting of the South Lake Tahoe City Council to discuss the 2011-12 budget will be held this Thursday, Sept. 15 at 7pm. Not only is this the first look the public will have at the proposed budget, but this may be the only opportunity for public input before layoffs in crucial departments like streets and recreation. The regular council meeting is scheduled for Tuesday at 9 a.m.

With a projected budget shortfall of $5.8 million over the next 5 years, the city faces recession-related issues. The message from City Manager Tony O'Rourke and Council is that austerity is inevitable. Why these cuts have to come from the heart of the city’s services, is not being explained, some employees say.

Twenty-one more layoffs are slated to come from the city’s non-safety workforce, which has already seen a 25.7 percent reduction since 2009 through early retirements, frozen vacancies and re-organization.

The Plan
The city council adopted its Five Year Strategic plan in March, to little public acknowledgement and tepid union response. In June, Council then adopted the Business Plan ‘to operationalize the details.’ The plans, proposed by city manager Tony O’Rourke, were intended to show the public that the council was taking charge of its budget deficit and creating a brighter future for South Lake Tahoe.
“We have to do what every family across the country is doing,” O’Rourke says. “Which is learning to live within our means.”

Several jobs were eliminated in March, re-routed or just left vacant following early retirements. Mid- to upper- management positions have been consolidated into units with more responsibilities and less people in each unit to carry them out.

During the next four months, during the summer and the busiest time of the year for building, recreation, business, lodging and most other activities in Tahoe, the city remaining city employees were training for more responsibility as they were also working fewer days.

The domino effect, according to one city employee, is that the loss of $500 or more a month from pay cuts also impacts the personal home budget. That means less dining out and supporting local businesses, cringing when the child comes home from school needing something for class, and fewer visits to the dentist or doctor.

Though everyone in the employment structure took a 13 percent pay cut, according to employees, the cuts didn’t effect upper management the same way since they received raises at the same time. Some of these raises occurred due to automatic contract upgrades, others due to ‘increased responsibility’ incurred by re-organization.

Labor Issues
Some have been stating consistently that the bargaining units and employees have been dragging their feet. Not so, say employees.
They wanted to prepare for negotiations in the fall of 2010, knowing the contract was due to expire. While their previous representative was incommunicative, the city told employees to wait until March. The contract was made an addendum to for one year set to expire September 30.

It was in March when the council voted to begin layoffs by accepting the Strategic Plan.
At that meeting then union representative Jerry Copeland of Sierra Employee Association Local #1 made no public comments regarding the council’s approval of layoffs. According to employees, they knew they needed to change representation at that point, but they were legally unable to take the next steps until 120 days before their contract was set to expire which was May 30.

On June 14, employees voted 42-0 and received authorization from the State Mediation and Conciliation Service granting them certification as part of Stationary Engineers Local Union #39. At that time Steve Crouch began working with employees immediately, knowing negotiations were already imminent. He was also in touch with the city, and initial meetings with city negotiating team were rumored to be tense at best.

According to Crouch he came onboard that same day and was ready to talk. One of the first things that happen in any negotiation, he says, is that the parties agree upon “ground rules,” such as who will be there, how often you will meet, etc. The first thing the City wanted to do was put a gag order on the negotiations. Crouch said, “absolutely not.”

“We have to be able to communicate openly with our employees, the community, and discuss what this means to them,” He said. “I want the world to know what’s going on here.”
He was also disturbed when the City changed the amounts needed to balance the budget. According to Crouch, at the first meeting August 12 he was told that the city needed $375,000 in cuts from employees. He went back to the drawing board and worked to find that money in pensions and other cuts. At the August 24 meeting, Crouch was told the new number was $1.4 million.
“We really are trying to make an honest effort to work with the city, but if you keep moving the target, how can I believe the numbers at all,” he added.

One of Crouch’s standard practices is to research the city’s standings. The CAFR (Comprehensive Annual Financial Report) is an audit of state and local governments compiled through the state controller’s office. He states that the past 2 years show an improvement of overall fiscal health for the city. He says the city refutes that report and continues to tell him they are functioning in deficit.

First Quarter Report equals more bad news
When the First Quarter report was given at the August Council meeting, it outlined continuing dismal revenues, further reductions in state funds, and increased the budget shortfall by another $1.8 due to a pending loss of redevelopment funds.

More cuts were suggested By O’Rourke to continue to close the gap in the budget, set to be approved by council’s September 13 meeting. Discussion between Council and City Manager ensued about balancing the budget solely through personnel cuts. Both Council and O’rourke ruminated that it was unfortunate to have to lay more people off.

“I believe this decision will continue to build trust between the City and the people of South Lake Tahoe,” Tom Davis said during the discussion.
By that Friday, over 20 employees were notified that they had two weeks to prepare for layoff, and 30 days to clear out following the impending budget vote by Council.
The MOU for Classified Employees outlines a specific procedure for layoffs:
1. City Council first cites the cause for cuts and says how much needs to be cut, how many jobs are to be eliminated, and from what classification.
2. The Human Resource Dept. gives them a list which scores employees by seniority and responsibilities, so that those with the least amount of impact can be eliminated first.

However, the current round of layoffs looks somewhat different.
According to City manager O’Rourke, the conclusions over where to cut staff are determined by a much simpler formula.
“We choose by where and who we logically believe we have to make cuts in order to balance the budget,” he said. This restructuring formula does not consider classification or seniority.
He points out that in most instances, the responsibilities will be picked up by others in the department.
“We are all doing more with less, and while there may be a reduction in services, we will be using more private and not-for-profit groups to provide services by contract,” O’Rourke added.
But, the city shows inconsistencies repeatedly over the years, says Crouch.
“You say you have to make these draconian cuts involving people and services, and then you go and spend on frivolous things, like a $9,000 Christmas tree,’ says Crouch. “I could find over $1million in wasted money and save at least 10 jobs.”

Effects on the Ground
Of the more than 20 employees slated to be laid off, 11 may be cut from Streets, meaning plow operations this winter will be affected. The city says it can employ seasonal temporary workers to run the heavy equipment. Crouch says he has not seen this approach go well with other cities in the past.
“You cannot get seasonal people in 15 to 20 minutes on call when you need them,” he added. “It’s going to decimate the city.”

The Recreation Center is also hard hit. Employees are hesitant to sign residents up for classes, worried that they will not continue past the end of the month. Kids programs are in question, meaning after school care may be shouldered by other entities in town, such as Boys & Girls Club or private home facilities. Karen Houser, Director of Boys & Girls Club of South Lake Tahoe says she can’t speak to specifics until more information is made public by the City in a couple weeks.

“We are always partnering with the city in different ways,” she said. “We want to make sure that no services are lost for the kids.”
The other departments affected include positions from Development, such as engineering and redevelopment; and positions from the Internal department in finance. According to O'Rourke, there will be no temporary employees used to fill the gaps.
An interesting twist is that the finance positions are complementary ones, Revenue and Accounts Payable. Traditionally, these types of positions are separated to provide a check and balance on finance. Apparently managers will absorb these duties as well.

Done Deal
Though the Five-Year Plan is already approved and under implementation, it is still possible to save the services and redirect the cuts. The city budget is not due to be approved until Oct 1. Ironically, the contract for the employees is set to expire on Sept 30. This is a process that will continue for at least another month. However the need for public involvement is great according to Crouch.
“We have a really nice well knit group of people that work well and like each-other too,” he said. “The problem is that the employees are terrified, and we have got to find a way to get the public behind them.”
Employees who spoke were concerned with the state of the city foremost and their own predicament last. One expressed that unfortunately, they will already be “let go” before the public realizes what happened and tries to turn it around. Another expressed feelings that their department was “targeted” by the City Manager specifically because they stood up for themselves.

With over 100 public sector contracts in Northern California, Crouch has seen many versions of this current struggle.
“It is so common for (city officials) to inflate the projected deficits and create panic in the workforce,” he said. “Management pulls out their full arsenal at this time.”

According to O’Rourke, this is a necessary change that has to be endured by all in order to bring the City to a place of stability and sustainability. He brings up the volatility in the workplace that comes with the uncertainty of not knowing what will happen from year to year. And he cites that in the past, the City has taken “stopgap” measures, like furlough days, to fix the shortfalls.

“It’s like a family getting another credit card to pay the bills, and yes, it gets you through, but all it really does is get you down the road a bit, “ O’Rourke said. “What we are trying to do is get the city to a solid place going forward.”

Meanwhile with a local unemployment rate of 16 percent, the likelihood of families continuing to move off the hill for work continues to rise. As these children leave our school district, less funding is available; as families move from their neighborhoods, less is paid in property taxes. This is the continued domino effect of austerity, affecting a wide range of local agencies, funding and eventually services.

The Council has not yet voted on this action. The regular City Council meeting is scheduled for Tuesday, September 13 at 9am in the council chambers at the airport.

The budget workshop has been recently rescheduled separately from the regular council meeting, though there is no mention of this on the city website. Both Crouch and employees speculate this is to downplay public opposition. The budget workshop will take place in council chambers Thursday, September 15 at 7pm. Both meetings are open for public comment.