Signs of improvement in city budget |

Signs of improvement in city budget

Adam Jensen

The City of South Lake Tahoe isn’t expected to experience additional job cuts this year following some positive signs in the local economy.

The city’s hotel tax, known as Transient Occupancy Tax, for the first six months of the fiscal year is up 26 percent compared to last year, according to numbers presented to the City Council by City Manager Nancy Kerry Tuesday. Sales tax for October through December is up 13 percent over 2011 numbers, according to the figures.

Following budget adjustments approved by the council Tuesday, the city expects a budget shortfall of $252,732 for the 2012-13 fiscal year, a decrease from an anticipated $806,000 gap.

“However, given the increase reported, along with new businesses such as T J Maxx and Big 5, it is anticipated the increase in sales tax along with continued trends in TOT, the remaining projected shortfall should be eliminated by year’s end,” Kerry said in a staff report to the council.

Kerry told the council the local economy is still very dependent on the recovery of the global economy. The city can maintain its current, critical staffing levels, but the rising cost of employee benefits continues to be a concern, Kerry said.

City Councilman Hal Cole said he is still worried about the lack of regular infrastructure improvements in the budget numbers, saying it will be critical to the future of the city. City Councilwoman Angela Swanson also said she was concerned about the city continuing to see a projected shortfall.

Mayor Tom Davis said he was guardedly optimistic about the revenue side of the local economic equation.

“It looks like the summer bookings are ahead of last year,” Davis said, adding he hasn’t seen this level of early bookings since 2004-05.

Kerry said in the staff report she expects the city will be able to produce a balanced budget in the next few years.

“However, that will require continued improvements in the local economy, increases in the assessed valuation of the local housing market, mitigation of the seemingly unending rising costs of employee benefits and a strategic approach to investing in our tourism industry,” Kerry said.

One area where the council hopes to recover some costs is the parking garage at Heavenly Village. The council voted to explore refinancing options for bonds used for the garage. The parking garage has underperformed since its construction a decade ago. An annual subsidy from the city of about $200,000 for the garage is expected to continue through 2027 if some action isn’t taken.

Support Local Journalism

Support Local Journalism

Readers around the Lake Tahoe Basin and beyond make the Tahoe Tribune's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Your donation will help us continue to cover COVID-19 and our other vital local news.