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Mar. 07, 2008
Copyright © Las Vegas Review-Journal

ECONOMIC DIP: City to cut 31 positions in April

Slowdown in construction industry cited

By ALAN CHOATE
REVIEW-JOURNAL

The slumping economy has led to 31 positions being eliminated at the city of Las Vegas as revenues continue to tighten after almost a decade of growth.

The city already had to fill a $21.5 million hole in the current budget year by holding positions vacant and dipping into reserves.

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    • Now there's a shortfall in the Building and Safety Enterprise Fund because of a housing construction slowdown. The fund is absorbing the layoffs among its staff.

    "We're not in a crisis mode, even though laying off 31 people is a very unpleasant thing to have to do," said Las Vegas finance director Mark Vincent. "But we're not laying off hundreds and hundreds of people."

    The building and safety fund revenues come from fees on builders. The fund's employees check construction plans and perform inspections in the field.

    The building and safety fund was formed in 2001 and in some years had revenues upward of $19 million because of booming construction. But, as a city report states, "the last two fiscal years have witnessed a 36 percent reduction in B&S revenues with no end in sight."

    Future activity can be gauged by development applications, and there's not much in the pipeline, said City Manager Doug Selby.

    "It just plummeted," he said. "We don't have any general fund money to bail this function out, and even if we did, the work just isn't coming in."

    The layoffs take effect in April, when other cost-saving measures also will be put into place, such as:

    • Community and recreation centers will be closed on Sundays.

    • Some leisure service events and events requiring overtime will be eliminated.

    • An unspecified number of hourly, part-time positions will be cut.

    • Reductions will be made in travel, consultant and supply budgets.

    Those cuts are considered short-term steps to stave off additional layoffs.

    Projections call for revenues to remain tight for the next two years, which means city leaders will be scrutinizing bigger-ticket items such as capital projects, employee raises and, possibly, more job cuts. The city hasn't had to lay off workers for at least a decade, a city spokesperson said.

    "We think it'll be rough days ahead in terms of revenues for all local government," Selby said. "We want to kind of recalibrate the organization so that we're ready for that."

    At the heart of the situation is the consolidated sales tax, which makes up about half of the city's general fund budget, which is about $530 million this year.

    The past six quarters have seen "dismal" revenues from the "c-tax," and so far this budget year collections have declined 2.5 percent compared with the same period a year ago. Even in the shock after the Sept. 11, 2001, terrorist attacks, the city's sales tax revenues climbed slightly.

    The meltdown in the housing market last year ended Las Vegas' surge in sales tax collections, which showed double-digit growth from 2004 to 2006. But the drop is not related only to construction, Vincent said. People are spending less almost across the board, he said.

    "I think a lot of people were taking advantage of home values ... a lot of it was credit-related. Which explains why it fell off the table," he said. "People couldn't trade up anymore, and now they're figuring out that they can't even afford what they have."

    The scenario isn't expected to change much before 2010 or 2011.

    "We're not sure we've hit the bottom yet," Vincent said.

    A budget hearing before the Las Vegas City Council has been scheduled for March 31.

    Contact reporter Alan Choate at achoate@reviewjournal.com or (702) 229-6435.



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    Vegas Vic wrote on March 08, 2008 03:22 PM: The entire city infrastructure needs to be revamped and excess personnel should be cut from the roles of employed. If there is a budget crunch, something has to give and that something will end up being more jobs. Overstaffing will be resolved IF the city wants to keep itself financially and fiscally solvent.


    cas127 wrote on March 08, 2008 02:01 PM: Were these 31 "cuts" of actual, currently working employees - or 31 "slots" that had been scheduled to be filled as part of the 07-08 budget?

    One of the political class' biggest scams is the perpetual scheduling of endless employment increases so that when they have to "cut" (because we tax peons catch an economic bullet to the head) the political class can scream "staffing crisis" before they actually have to let go of any "hired voters" (you know, government workers - who are usually employed to provide support to never-ending government budget increases).


    cityworker wrote on March 08, 2008 12:49 AM: Well, many of the so-called overpaid cityworkers wouldn't live in LV in the first place if they didn't pay well. Why would I live in a city where a casino valet makes 60,000+ when I'm making 40? Sorry, I'll move somewhere else where the cost of living is cheaper. As far as the unions go how is it any different from guys that swing a hammer all day and make 50$ an hour?

    With every job cut thats less money flowing through the system. So whens your private sector job going to get cut?

    Sorry, but as a professional working in engineering I wouldn't have come here had they not made it worth it.


    Parkinson's Law wrote on March 07, 2008 08:30 PM: All of the local government agencies need to take a good, hard look at this and start making some tough choices. The first area to be addressed should be ending the gravy train of automatic cost of living raises that have been twice the CPI over the past few years. Second, quit rewarding mediocrity with automatic “merit” raises for merely having a pulse. If you don’t address this double-dipping, compounding issue, you’ll soon be paying janitors $75,000 per year. Take a look at your comp salaries and benefits and start getting a grip on reality. You’re headed for the same bubble burst that the overpriced housing market just experienced.


    Ernest Worrell wrote on March 07, 2008 01:16 PM: Fire the Indians, but keep the Chiefs. Typical.


    Charlie L. wrote on March 07, 2008 11:34 AM: Are you listening, City of Henderson? All that out of control growth you allowed has stopped, and all those little inspectors trucks seem to have disappeared-are the numbers of inspectors, plan checkers and the like diminishing also? Somehow I think not. And we know that the office people are all in the Teamsters, so they're untouchable. Right?


    Helen Weils wrote on March 07, 2008 10:08 AM: Only 31? How about cutting back 1,000 of these overpaid government employees?
    Start with Oscar Goodman and his tax and spend mentality.


    Sundays are for Recreation wrote on March 07, 2008 09:07 AM: Bright Idea: close parks and recreation centers on SUNDAYS when most KIDS are off from school, and many parents are off too! Whose bright idea is that?! How about Mondays instead!


    Money Trees grow in Hillary and Obama Land wrote on March 07, 2008 09:02 AM: Just 31 Zombies??! That is newsworthy? I suppose for Government bureacracy (lunacy). I say there are too many farts driving around in fancy Govt. vehicles, or trying to look busy. Meanwhile, private sector must face reality and real budgets.


    LittleBird wrote on March 07, 2008 08:56 AM: Maybe it won't be to long before the City wished it hadn't given away some of it's land (or hadn't allowed someone to trade it for a lesser price than market value).I think the County will be the next in line to feel the crunch.Maybe they will wish they had some of their prime land back(previously squndered away by airport officials,and the likes).I hate to say I told you so,but get ready for the ride.


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