City makes midyear budget changes
April 29, 2015
South Lake Tahoe adjusted its 2014-15 fiscal year budget on Tuesday, reflecting what City Manager Nancy Kerry called a positive effect in its efforts to reduce unfunded liabilities.
Kerry announced that a $48 million liability the city faced with its other post-employment benefit (OPEM) obligations in 2013 has fallen to $11.5 million.
The benefits include retiree healthcare benefits, something the city must track under the Governmental Accounting Standards Board.
This was done largely through a restructured plan for employees in 2014, including one of four optional plans with lower out-of-pocket expenses.
Kerry said while the plan resulted in more equitable benefits for employees, the city's current workforce sacrificed some of its retiree health benefits.
Had the changes not occurred, Kerry said the city would be facing an estimated $53 million obligation. With the current structure, the city expects to fund its OPEM obligations 95 percent within 11 years, and overall health care costs by 35 percent.
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Revenue and operational changes were approved by the council as well after Kerry presented in building revenues and salary savings, as well as anticipated one-time money from the state.
Building fees brought in $250,000 and $50,000 in fire inspector fees. Salary savings from unfilled or vacant positions netted $183,625 and $77,866 is expected from the state as it winds down one of its complex funding mechanisms.
A lot of the revenue went to fund additional staffing for the reminder of the fiscal year, including a full time fire inspector, and additions to the building department. Funding also included operation expenses, including fleet maintenance, code enforcement clean up and onetime expenses such as the 50th Anniversary Celebration, a fuel pump system replacement, and purchase of 13 defibrillators for public buildings.
The midyear budget adjustment also established eight capital improvement project funds, including a $300,000 account for a police department security fence and roof repair, remodel of the city hall/visitor's center, economic studies, and a cost/benefit analysts of a city event center.
Setting up the accounts provide the mechanism for funding, Kerry said, not actual spending. Most require the city council's formal approval.
Also approved was a $1.1 million transfer from the city's transient occupancy tax trust fund to the South Tahoe Redevelopment Agency for bond payments. This leaves $362,023 in the trust fund.
The city established the trust fund two years ago to collect excess funds in its redevelopment area should property taxes prove insufficient.