SOUTH LAKE TAHOE, Calif.—Councilmembers began their day early Tuesday morning, Nov. 7, at 8 a.m. with a closed special session. The council invited public comment on any of the three special session agenda items before they closed the session to the public.

The only agenda item eliciting public comment is the current litigation of South Lake Tahoe Property Owners Group v. City of South Lake Tahoe, California—a David and Goliath story—as one public commenter refers to it.

Last month, the appellate court upheld the City of South Lake Tahoe’s T measure, banning short term rentals in residential neighborhoods, almost in its entirety, City Attorney Stroud says. The only part of the measure not affirmed by the upper court is the provision allowing qualified vacation home permits to permanent resident owners. It provides them the ability to rent their property short term up to 30 days a year in the otherwise off limit residential neighborhoods.

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This part of the measure was remanded back to the trial court to decide whether that violates the dormant Commerce Clause of the U.S. Constitution. It’s this clause that allows congress to regulate interstate commerce, according to Stroud. She says the U.S. Supreme Court has interpreted it to include a negative provision that forbids certain state economic regulations that discriminate against interstate commerce.

“The most important thing,” Stroud says, “is that the court of appeals upheld measure T almost in its entirety except for this one provision, so the rest of it will continue to remain in place.”

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Stroud says the upper court remanding this part back to the trial court gives the city a chance to justify that discrimination against interstate commerce. To do this, she says the city will need to show that the qualified vacation home permits to permanent resident owners advances a legitimate local purpose that cannot otherwise be served by reasonable nondiscriminatory alternatives.

There’s no word yet on when this trial will take place.

One public commenter says that if they lose that part of the measure, it’s an unfortunate but reasonable trade off to maintain safe and nice neighborhoods for those who live here.

The council provided an update on the closed session once the regular session began. They said no reportable actions occurred on any of the closed session agenda items during their one hour meeting.

Moving on to the consent agenda, the council passed all items unanimously except for Councilmember Robbins voting no of items seven and 17, regarding Electrical Facilities Cost Sharing Agreement with Caltrans, and Amendments to Agreements with Jviation and ESA for the Airport Master Plan Update and Appropriation of Funds, respectively.

Mayor Creegan recused herself from item nine and 15 due to real property interests in the subject areas, both concerning the Multi-Generational Recreation and Aquatic Center.

Included in the passed consent agenda items are past and current fiscal year items, fund appropriations, custodial agreements, snow equipment repairs, amendments and other routine items passed in a single action. All the items can be viewed on the city’s website.

A stewardship presentation that sparked debate

One topic that sparked debate began as a presentation from multiple agencies on a lake-wide stewardship plan. City Manager Joseph Irvin says the plan “will balance the needs of the environment, businesses, visitors, and local communities,” by inspiring all to take care of Tahoe.

The plan, with roughly 20 partnering agencies, is in its early stages, although the plan has hired a managing director and established a council. Its next step is to secure funding and create actions teams and plans, including a communication strategy.

The partner presenters include the Tahoe Regional Planning Agency, the Lake Tahoe Visitors Authority, and the Tahoe Fund. They say some of their immediate actions include increased trash service, microtransit in the north and south shores, and expanded Take Care Tahoe messaging campaigns.

The plan so far is based off of resident and visitor surveys, one-on-one interviews, 15 discussion groups, nine workshops, and more than 16 core team meetings.

Resident surveys showed high satisfaction of living in the Tahoe area, but only 21 percent agree that tourism and recreation support their quality of life and sense of community. Further, 29 percent agree that the positive benefits of tourism and recreation outweigh the negative impacts.

To these numbers, presenter Carol Chaplain of the LTVA remarks, “we have a lot of work to do.”

This is what sparked questions from Councilmember Robbins, asking, in more than one way, whether the roughly 80% who don’t agree that tourism and recreation support their quality of life are wrong and just need to be educated, or that there actually is a problem that they are seeing.

Chaplain responds, saying they can make a better promotional effort to help residents understand what the tourism economy can do. She says the stewardship plan provides an opportunity to look at ways to harness tourism and educate residents.

Robbins continued to press other questions, to which Mayor Creegan reminded, “this is not testimony. These are invited members of our community who are making a presentation to us. This isn’t an adversarial process. This city is a member of this council.”

Robbins interrupted, “I have questions about that as well.”

After a number of other questions, Robbins asked why none of the commitments by agencies were binding in the plan. Devin Middlebrook of the TRPA responded, saying each agency showing up the last three years and their financial commitments speak for themselves. He says, “coming together and having folks voluntarily sign on to this is how we do things in Tahoe in the spirit of partnership and collaboration.”

Middlebrook continued to say Tahoe has a history of doing things this way and that’s how they will continue to pursue it. He did go on to say that as they evolve, partners will sign charters and memorandums of understanding.

Mayor Pro Tem Cody Bass applauded the plan and remarked how challenging it can be to manage one destination from multiple jurisdictions. He says it’s the first time a voluntary board has created something like this outside of a governing board, “my message is now that we’ve done the work, let’s follow through with it.”

Councilmember John Friedrich asked how the plan intends to make South Lake Tahoe’s plastic water bottle ban extend lake-wide. Middlebrook responded, saying they would amplify the success in South Lake with outreach and marketing. When other jurisdictions look at it as a model, they can then bridge that gap.

Public commenters were skeptical, one pointing out that there’s always going to be a percentage of the population that will remain unchanged and educating 100% is impossible.

There were no actionable items on the plan for the council to vote on since it was a presentation.

Efforts for affordable housing

Associate Housing Planner Jessica Wackenhut-Lomeli proposed a local tenant preference policy that would prioritize certain households in tenant selections with a goal of counter acting displacement due to increased housing costs. In the order of preference, the eligible households receiving priority under the proposed policy include displaced households, neighborhood residents, and South Lake Tahoe residents and South Lake Tahoe workers.

The policy would require owners to pick these households for affordable housing before others for a certain percentage of their units.

However, the first step in this process as required by fair housing laws is to conduct disparate impact analysis, which looks into whether the preference policy would violate those laws by unnecessarily excluding certain classes from housing opportunities.

Wackenhut-Lomeli called on the council for direction on parameters for the analysis, including geographical factors. With the guidance of Interim Director of Development Services Zach Thomas, they motioned to move forward with the plan and perform a general wider analysis and narrow down the policy impacted area later.

A part of the study will include an analysis of what percentage of available affordable housing units can be set aside for local tenant preference. The proposal shows other California jurisdictions setting aside between 15 and 40%. The council requested the study look into what a 100% figure would look like for the disparate impact analysis.

City Attorney Stroud says the one caveat to having 100% of affordable units set aside for local tenant preference is a constitutional right. However, Wackenhut-Lomeli said they can move forward with the framework and determine percentages later.

Wackenhut-Lomeli said analysis could take three to six months, with the end result being implemented potentially after eight months.

Council requested their current housing wait list be tied into selections. City Manager Irvin said the city will provide quarterly updates on the housing waiting list starting January that can be tied in.

Councilmember Robbins proposed the motion to allow the city manager to move forward with the policy per the items discussed and it passed unanimously.

The council also heard the first reading of an inclusionary housing ordinance. The proposal would require new single family builds or condos to include housing for low income households or pay in-lieu fees instead. This would not affect multi-family apartment developments.

These in-lieu fees are based on a tiered system that go up with increased building size. Any dwelling 2,000 square feet and below is exempt.

The fees will fund the city’s housing initiatives. Thomas says the city designed the ordinance to not impact construction on houses that will most likely be used by local residents, as opposed to a 10,000 square foot mansion that’s often a vacation home.

He says with the tiered system, if residential builds do go a bit over the 2,000 square foot mark, they will only be hit with the smaller fee.

One public commenter says he doesn’t think the ordinance is good idea, saying he doesn’t feel it’s proportional and worries the city may be opening itself to a lawsuit. He says it’s already hard enough to develop anything in Tahoe and went on to say that no one wants mansions built, but “mores structures built in the city are more structures built in the city.” He continued, saying more supply will lead to less rents. He worries this is a stick approach, and a stick will cause less to be built and encourages a carrot approach instead.

Robbins addressed this comment in discussion, saying more is not more here in Lake Tahoe where land is limited. He said it’s not Sparks with an extensive amount of desert to develop. He says for every one mansion are four or five moderately sized houses that can’t get built.

Mayor Creegan says she’s in favor of the ordinance, but, did agree with the public commenter, saying, if that mansion didn’t get built, then those smaller buildings probably wouldn’t get built either, “because they don’t pencil out to the builders.”

She went on to say this ordinance is intended to be both the carrot and the stick, but whether it acts as such remains to be seen.

The council unanimously voted to pass this first reading and hold a second reading and potentially adopt it at the next council meeting on Nov. 21, 2023, with the request from Robbins that an efficacy report be provided one year after it has been implemented.

In the shadow of Heavenly mountain

A significant portion of the over five-hour discussion involved agenda items affecting the neighborhoods and areas in the shadow of the Heavenly Mountain Resort.

City Manager Irvin recused himself due to having a house in the area.

The first part of the discussion included changing the parking parameters on Regina Road and Keller Road from the prior resolution. The new resolution would create no parking on the westerly side of Regina Road from the intersection of Ski Run Blvd to Keller Road and require residential permit parking on the easterly side.

On Keller Road from the intersection with Sherman Way to the intersection with Saddle Road, the adjustments from the prior plan proposes no parking on the westerly side and residential permit parking on the easterly side.

The full resolution of permit parking and no parking zones near the Heavenly village neighborhoods is designed to address residents’ concerns of congestion, illegal parking, and general nuisance in their neighborhoods. That resolution is linked on the Nov. 7, 2023 city council agenda.

The council passed this new resolution and moved on a topic of larger debate, parking agreement negotiations with Heavenly Resort. It further addresses the residents’ concerns as well as lays out Vail Resort’s share of costs for Ski Run Boulevard rehabilitation and on-street parking.

The council ultimately passed a motion for staff to continue to negotiate a parking agreement, rather than terminate it with a 180 day notice. The negotiations would make an amendment to change the 180 day termination notice to a 90 day termination notice to allow more flexibility with their annexation plans. Their hope is that this change will keep them from getting contractually stuck in the agreement for the 2024 – 2025 ski season.

But one factor to the agreement that sparked much debate was the discrepancy between the city’s calculations and Vail’s calculations of how much the resort will pay for both street rehabilitation and on-street parking.

Vail’s number for their share in street rehabilitation is $106,382, while the city’s is $217,222.

And for on-street overflow parking, the city staff recommended $155,200, while Vail offered $54,320, which has about $15,000 subtracted from their initial amount for snow removal services.

After much deliberation and back and forth, Bass said the parking deal with Heavenly isn’t ideal, but it moves the collaboration process forward and allows them turn their focus towards annexation.

Their talk on annexation was focused on expanding the previously proposed annexation area. The reason for this expansion is the fiscal impact. The city says in their staff report that they’ve been unable to ascertain whether Heavenly’s recorded point of sale is within the already proposed area or just outside of it.

The reason for making sure the point of sale is within the annexed territory is to ensure city can capture those taxes since it already provides services congruent to it. To cover this, they plan on expanding the annexation application to the 12 parcels Heavenly sits on and as well as 16 more parcels all the way to the Nevada state line to avoid creating a stranded area within unincorporated El Dorado County.

Councilmember Friedrich remarked it is as a fun fact that Heavenly has never been a part of the city, saying annexing is a win-win that addresses the parking issues and allows for more taxable revenue they can use to repair the roads.

Robbins expressed concern over not knowing exactly where the point of sale is or the amount of revenue to be made from valley lodge taxes, saying they do not know how much is at stake with annexation.

Bass echoed his concerns, equating it to shooting in the dark, but believes in moving forward.

Mayor Creegan agreed with moving forward, saying if the area needs to be bigger because they are unsure of the data, “it’s not a detriment to the city.”

With that discussion, the council unanimously passed a motion directing the city manager and city attorney to prepare an application to El Dorado Local Agency Formation Commission for an expanded annexation area in the Heavenly area.

Midtown revitalization

Amid the 32 agenda items was an item addressing the future revitalization of the midtown area. The city’s strategic plan directs the city to provide land use guidance for all future redevelopment and development opportunities in the area as a part of the plan.

However, the plan has ran into to some hiccups. The city initially wanted to create the plan internally by hiring a senior planner for the project under a two year term. There were no applications to the city’s initial hiring outreach. They suspect the lack of interest could have been due to the limited term.

This brought the council to consider hiring an outside consulting agency to the table. The costs of that direction brought the council around again to doing the plan in-house. This time, they looked to hire a senior planner without the two year term. The city determined there would be adequate work to support this.

They were successful in finding a candidate, but the candidate dropped out due to unforeseen circumstances.

The council found themselves again at the drawing board with ultimately four options at Tuesday’s council meeting.

• Option one: appropriate funds to complete the midtown area plan as initially proposed with the assistance of a consulting team.
• Option 2(a): reduce these consultation fees by limiting the midtown area plan to only the Bijou and Al Tahoe Community Plan and the Sierra Tract Commercial Plan Area Statement. A separate Master Plan would be prepared for the park and the golf course.
• Option 2(b): similar the 2(a), but in lieu of a master plan, a focused Implementation Plan for Bijou Park and Gold Course would be prepared.
• The final option: direct the city manager to recruit a senior planner, this time with the caveat that additional technical assistance from consultants would be required to complete the midtown area plan.

After much deliberation, council moved to opt for the final option to recruit a senior planner again, but with added caveat. They also moved to include option 2(b) in the plan to move forward with a focused Implementation Plan for Bijou Park and Golf Course.

In good faith

City Attorney Stroud presented an ordinance requiring Public Works to hire locally in a good faith effort. The proposed ordinance would apply to projects over $200,000 and require 15% of the contractors hired by project managers be local to South Lake Tahoe.

Robbins questioned how they can assess that a good faith effort has actually been made. Stroud said that’s up to Public Works to determine that, with City Manager Irvin adding, it’s new work and they’d have to create a process.

Friedrich suggested a workforce development as a part of the plan from local high schools and college programs creating a pipeline of workers for this demand.

They passed a motion for its second reading and adoption at the next meeting.

Planning commission still vacant

Two candidates for the planning commissioner position were present at the council meeting. Commissioner Nick Speal left the seat vacant after he resigned from the planning commission on Sept. 27, 2023.

Jackson Realo and Doug Williams each made their cases to the council for their selection. Councilmember Robbins offered a “hard no” on Williams, while Bass and Friedrich said while Williams and Realo are strong candidates, they like to keep the recruitment process open longer.

Creegan suggested hiring Williams at the meeting since he can hit the ground running. Councilmember Wallace followed suit, saying he has a track record from serving before. Wallace motioned to appoint Williams, but it failed with a no from Robbins, Bass and Friedrich, leaving recruitment open.

Other business

Other items discussed include decisions on the Purchase and Sale Agreement for Disposition of Exempt Surplus Property at 3900 and 3908 Lake Tahoe Boulevard, and the South Lake Tahoe Tourism Improvement District’s Annual Report for Fiscal Year 2022-2023.

The full agenda and video of the session can be accessed on the city’s website.