Guest View: What is the city’s plan for revenue?
It was with great interest that many in the community watched as the City Council dealt with the decision on the application from the Do it Yourself Center for a permit to go into the old South Shore Motors building. As usual the community was represented by those who are for it and those who are against it. But as I watched this scenario unfold from the Planning Commission to the City Council, a bigger question emerged. The latest vote by our representatives begs the question, just what is the city’s economic development strategy?
The city budget is pretty straight forward: It receives funds from sales tax, transient occupancy tax, property tax, business licenses and fees. The question that this city and all California cities are now asking is where to find new revenues to pay for city expenses and services. One only has to look at the most recent city budgets to see the growth in expenses within public safety and the city finance department to know that these increases will not be sustainable without significant increases in revenue. While the city has already cut tourism funding, one can only speculate what will be the next cut within the existing budget. But what we do know is that if the city does not find new revenue sources soon, the only way it will be able to cover planned growth in expenditures is to further cut services or raise taxes. In today’s challenged economy, neither would be palatable to the residents.
How to increase revenues then? Typically a city has two choices: economic development and increases in taxes and fees. The first and preferred choice to increase revenues is to grow revenue through economic development. However, the economic recession and recent city actions have limited those options and called into question the city’s lack of vision with regard to future revenue needs. To recap some recent decisions that illustrate this, I submit the following:
n Redevelopment: The City Council and city manager have seen redevelopment stopped in its tracks due in large part to the recession. This is not to diminish the responsibility of the developer for not having secured funding, but the recession has had an impact on many development projects throughout both the state and nation.
n Tourism: The City Council and city manager have stopped tourism funding with recent cuts to the LTVA budget. Whether you like the organization or not, the LTVA does promote the South Shore tourism industry, which as far as I can tell is the only industry of any magnitude we have. With the elimination of tourism funding for the LTVA, there is in fact a reduced ability to promote the destination that drives the bulk of taxes and jobs in this community.
n Business attraction: With the vote on the Do It Yourself Center, the City Council voted against attracting a new business and sent what many believe is the wrong message to those who may want to do business here. What the city did was inject itself into the business of trying to pick winners and losers within the business community, instead of letting the market decide. This falls into the realm of small-scale industrial planning.
n Business retention: The city never has had a clear business retention strategy.
So given these actions, the question must be asked: Just what is the city of South Lake Tahoe’s economic and revenue development strategy? Rather, does it have one?
You see, looked at individually, each of these actions (each with its supporters and opposition) can be interpreted on its own merits. But looked at as a whole, these actions clearly indicate that the city has no cohesive revenue development strategy, but appears to bounce from one issue to the next (reacting to whoever screams the loudest or whoever packs the Council chambers) with no overarching vision with which to help guide decision-making for the long-term benefit of the whole community.
What the City Manager and City Council need to do is show some leadership by working together with the local residents and business community (many of whom are already working on the issue) and present a clear, cohesive and integrated revenue development plan that shows the community direction and plan with regard to the future of the city economy. Short of this the city is lost in the weeds.
– Carl Ribaudo is President of the Strategic Marketing Group located in South Lake Tahoe.
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