A former city employee accused of profiting from the transfer of a city-owned development right has been arrested on suspicion of embezzlement and grand theft.
Thursday's arrest of Mary Kay McLanahan, 52, at her Placerville home is prompting the agency that regulates development at Lake Tahoe to impose greater oversight for such transfers.
Development rights are needed for construction of certain projects in the environmentally sensitive Tahoe Basin.
McLanahan, a former South Lake Tahoe associate city planner, is accused of transferring a city-owned right for construction of a home to someone else about a decade ago for a personal gain of about $100,000.
"We have been working with the city of South Lake Tahoe to develop a procedure that will hopefully prevent this from happening in the future ... and will be expanding that to other jurisdictions," said Paul Nielsen, principal planner for the Tahoe Regional Planning Agency.
McLanahan's arrest capped a two-year investigation that began when a man checked with the city to determine if a development right he got in 1992 could be transferred to another property.
Other development right transfers are under investigation, said South Lake Tahoe police Sgt. Brian Williams.
"There are several people, I wouldn't call them suspects, who had dealings with (McLanahan) while she was" with the city, Williams told the Reno Gazette-Journal.
El Dorado County Assistant District Attorney Hans Uthe said no other city employees are under investigation.
City Attorney Catherine DiCamillo was pleased the city might be able to receive reimbursement. The city is seeking repayment in civil court.
"It's very disheartening to know that it occurred," she told the Tahoe Daily Tribune. "I'm pleased it resulted into a prosecution."
Under a proposal worked out between TRPA and the city, both the city attorney and a city building director would have to sign off on future transfers of city-owned development rights.
The TRPA wants to extend the new policy to other local governments at Tahoe.
"We would hope it would be in the next three months or so," Nielsen said.