City to discuss layoffs on Tuesday |

City to discuss layoffs on Tuesday

Adam Jensen

SOUTH LAKE TAHOE, Calif. – Eight jobs could be cut from South Lake Tahoe city government under a proposed regorganization plan to be discussed by the City Council Tuesday.

The plan, developed by City Manager Tony O’Rourke, is part of a five year financial strategy designed to eliminate projected annual budget deficits of about $3.4 million during the next five years.

City Council members will consider approving the reorganization plan and financial strategy during their Tuesday meeting.

Finance Director Christine Vuletich and a task force of more than 40 employees provided input into parts of the financial strategy, but not the reorganization plan.

Proposals to increase fees at popular city-run recreational facilities, change employee health and pension plan contributions and increase the city’s hotel tax are also included in the strategy.

“Due to the lagging economic recovery, the City’s fiscal position has worsened,” O’Rourke wrote in the proposal. “The Great Recession has been longer and deeper than expected. Without aggressive cost containment measures, the City’s financial health is in jeopardy.”

Redevelopment and Housing Director Eugene Palazzo, Assistant City Manager Rick Angelocci and Assistant Parks and Recreation Director Chris Hawken were dismissed Feb. 23 as an initial step in reorganization plan. The three employees were considered “at will,” and subject to release at any time.

The plan proposes eliminating eight additional positions and offering early retirement packages to employees under nine classifications.

O’Rourke has also proposed eliminating twice monthly furlough days, requiring employees to contribute more to pension and health plans and instituting a cost of living wage freeze.

“City employees should receive reliable and competitive market benefits,” O’Rourke wrote in the strategy. “However, city employees should assume a fair share of the risks and costs of these benefits. Currently, all employees, with the exception of police, pay nothing towards their pension benefit.”

Under the proposal, employees would assume their share of pension contributions, ranging from 3 to 9 percent depending on which labor group they fall under. The proposal equals about $880,000 in annual savings to the city.

“In addition to pension costs, the city is increasingly impacted by growing employee and retiree health care cost,” O’Rourke wrote. “Currently the cost for health care per employee is approximately $18,500 annually per employee, and $14,900 annually per retiree. On average, employees are contributing 4 percent, and retirees 12 percent respectively to the City’s annual health care cost. This cost structure cannot be sustained.”

O’Rourke proposes negotiating with city labor groups to generate at least $550,000 in annual savings in health care costs.

The financial strategy also recommends increasing fees at Bijou Golf Course by $2 per round, at Campground by the Lake by $5 per day and the Recreation Center swimming pool by an unspecified “modest” amount. The increases will add about $200,000 to recreation department revenues annually.

O’Rourke also suggests management of the Ice Arena and Airport should regularly be opened to outside vendors to make ensure efficient operation.

The strategy also envisions a 2 percent increase to the existing 10 percent hotel tax in 2014 and a 5 percent amusement tax on recreational rentals and the Tahoe queen. The taxes could raise as much as $500,000 annually. Both tax increases would require approval by a majority of voters.

Metered parking at city beaches could also generate $450,000 annually if initiated in 2014, according to the plan.

The City Council will discuss the plan at their regularly scheduled meeting, start 9 a.m. Tuesday in council chambers at Lake Tahoe Airport.

Editor’s note – This story clarifies a previous version regarding city employees’ input into the reorganization plan and financial strategy.

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