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September 18, 2012
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City approves budget, layoffs

The South Lake Tahoe City Council unanimously approved a budget for the 2012-2013 fiscal year Tuesday evening.

The council voted in favor of proposed measures to fill a $1.6 million gap in the city's $84 million budget. The budget proposals were developed with the assistance of every city department, as well as City Council input during the past few months, according to City Manager Nancy Kerry.

Budget-balancing measures include the elimination of three unfilled positions and the layoffs of city buyer Gary O'Neill, risk management coordinator Michelle Beckwith and street superintendent Marnell Heinz. Each of the positions is under contract with the city until the end of the year. Heinz will remain with the city until a new public works director is hired under the budget, according to budget documents.

Engineering Director Sarah Hussong-Johnson is also expected to become a part-time city engineer/deputy public works director under Tuesday's approval, which also includes the expectation the city will use about $700,000 in reserve funding to balance the budget.

The city has faced budget deficits for the past five years. Budget gaps are expected to continue if additional measures are not taken in coming years, Kerry said in her budget message to the council. Reigning in ballooning health care and retirement costs was a major theme of Kerry's message to the council.

"Budget deficits are projected to continue if economic recovery does not happen in South Lake Tahoe," Kerry said. "A variety of solutions are required to resolve the structural deficit and will likely include more contributions from employees to their retirement and health care expenses and improving the local economy through a community approach (shared agreements) to attracting capital investments. Without significant increases in revenues, the community could see reductions in essential services."

Despite the possibility of future deficits, Kerry said there are signs of hope on the horizon.

"The summer of 2012 demonstrates recovery momentum is beginning," Kerry said. "Hotel occupancy rates are up and visitors are shopping, dining and enjoying the community. FY 2012 budget is on track to perform better (by $400,000) than projected mid-year 2012 and we are hopeful for similar outcomes in FY 2013 and beyond."

The council approved a three-and-a-half year contract for Interim City Manager Nancy Kerry to become city manager on a long term basis. The contract includes a $170,000 salary, six months severance for termination without cause and requires Kerry to give two months notice prior to any resignation. The city will not fill Kerry's previous position of assistant to the city manager.


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Tahoe Daily Tribune Updated Sep 18, 2012 10:04PM Published Sep 18, 2012 10:01PM Copyright 2012 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.