CITY FINANCES: LV begins belt-tightening - News

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

CORRECTION: This story in Tuesday’s Review-Journal on revenue shortfalls in Las Vegas gave an incorrect first name for City Manager Doug Selby.

CITY FINANCES: LV begins belt-tightening

Officials brace for $150 million budget gap

By ALAN CHOATE
REVIEW-JOURNAL

Custodial shift supervisor Joe Ferrigno listens during a Las Vegas City Council meeting on budget issues. The city faces big budget problems because of the economic downturn, and the goal is to trim spending growth enough so layoffs won't be necessary.
Photo by Jessica Ebelhar/Review-Journal

From left, Las Vegas City Council members Steve Ross, Steve Wolfson, Ricki Barlow, Mayor Oscar Goodman, Mayor Pro Tem Gary Reese and Lois Tarkanian listen to speakers Monday during a meeting aimed at identifying ways to balance the city's budget in the face of revenue shortfalls.
Photo by Jessica Ebelhar/Review-Journal

Las Vegas moved forward Monday with a package of cost-cutting measures aimed at balancing the city's budget in five years while also avoiding layoffs, provided that employee unions and the city can agree on how to keep personnel costs from outstripping revenues.

City leaders are trying to plug a deficit estimated at $150 million over the next five years caused by the increasingly sluggish economy, which has meant a reduction in the city's tax revenue.

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At the end of a daylong workshop, City Council members approved steps that would cover about $124million of that shortfall, with the rest being made up by reserves.

Officers from the four unions that represent 90 percent of the city's work force said they're willing to talk with city leaders but didn't make any specific promises.

And while the meeting was cordial, union members in attendance made it clear that city officials would have to make a very convincing case if workers are going to accept lower salaries in the future.

"This is going to be a difficult sell to the people I represent," said Chris Collins, executive director of the Las Vegas Police Protective Association, which represents Las Vegas marshals.

And it can't be a one-sided deal, said Bruce Snyder, general counsel for the Las Vegas City Employees Association. People are concerned about job security, and the city will have to take steps in any agreement "so that it attracts our members."

Council members approved the following steps:

• Eliminating $4.9 million of vacant positions and $1.9 million in non-labor costs.

• Maintaining the $20 million in cuts that have already been made.

• Delaying capital projects for a year that would require additional staffing or maintenance once complete.

• Increasing some fees the city collects, although those would have to be approved by the council separately.

The main component, though, will be slowing down growth in wages by revising the union contracts. Salaries and benefits make up about 75 percent of the city's $550 million annual operating costs.

Wage growth is 4.7 percent a year, said finance director Mark Vincent, and it needs to be trimmed to at least 3.8 percent. That would save the city $49 million over five years.

"There's no scenario I've run that balances the budget without considerations from the bargaining units," Vincent said.

Snyder said the city employees association's analysis tracks with Vincent's -- that roughly a 1 percent reduction in salary growth would keep the city from having to cut jobs to make ends meet.

How that cut will be achieved hasn't been determined yet. The city had proposed reducing the annual "step" increases to 2.5 percent from 5 percent, but annual cost-of-living allowances, or COLAs, also will be looked at, said city spokesman David Riggleman. Annual cost-of-living increases range from 3 percent to 4 percent among the city's employee groups.

"It could come from reduction in COLA. It could come from reductions in the step increase, or any combination thereof," Riggleman said. "That rate of growth has to slow down."

The unions will scrutinize the city's numbers further to make sure they agree with the city's case, Snyder and Collins said.

Council members and Mayor Oscar Goodman, meanwhile, urged the parties not to become confrontational.

"Labor costs put us in this situation, and labor costs will be part of the ultimate solution," said Councilman Larry Brown.

"We all better work together or we will be casualties," Goodman said. "It's going to be very difficult to accomplish this on a piecemeal share. If there's hard-nosing on this, it's going to be disastrous."

He asked for an update -- and preferably an agreement -- at the Dec. 3 City Council meeting.

City Manager David Doug Selby said that's probably not enough time. In his presentation, he set a Feb. 1 deadline to have a deal in place.

If there's no progress by then, "our options at that point are primarily reductions in services and programs," Selby said.

"Was that a nice way of saying people are going to lose their jobs?" asked Councilwoman Lois Tarkanian.

"Yes," Selby answered.

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

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Taxpayer wrote on October 07, 2008 10:22 PM: The solution, CUT,CUT,CUT,CUT,CUT,CUT,CUT,CUT! CUT PERSONNEL, CUT PROGRAMS, CUT CAPITAL SPENDING, CUT UNTIL THE BLEEDING STOPS! IF THE UNIONS DONT COOPERATE, CUT, CUT, CUT, CUT! New City Hall wrote on October 07, 2008 07:03 PM: Don't forget about the money being allocated for building a New City Hall. "WE CAN'T CUT THAT IF WE WANT TO BE A WORLD-CLASS CITY!" Just lay off the skilled workers and tighten THEIR belts. Liberals For Obama wrote on October 07, 2008 05:46 PM: OBAMA CAN'T BE TRUSTED BY LIBERALS OBAMA SECRECTLY WANTS TO DO AWAY WITH AMERICA. OBAMA WILL PUSH FOR TAX HIKES ON EVERYONE. OBAMA NEVER SERVED IN THE ARMED FORCES,HE HATES THEM.UNLESS HE CAN GET A PHOTO OP. OBAMA WILL CONTINUE THE DISASTROUS POLICYS OF THE SOCIALIST AGENDA. DONT VOTE FOR OBAMA,HE HATES AMERICA. 6packJoe wrote on October 07, 2008 05:11 PM: There's still a lot of fat to cut. We really do have too many government employees. No one wants to lay them off because those government employees do have families to support. If the city invests more money into software, we could probably cut half the state jobs. But understandably no one wants to tell someone they have to clean out their desk. ..temujin ... khan of the yakka mongols ... wrote on October 07, 2008 05:07 PM: ....Pours a Slug of Whiskey for Hollis..(Wink..Wink..) Hollis wrote on October 07, 2008 04:36 PM: "....Now is the time to look at decriminalizing the herb marijuana and treating it as a revenue source." Thats actually a really good idea. Make LV sortof an American Amsterdam. Seriously. If its between a failing economy and that I think I know what our leaders will do. Tim wrote on October 07, 2008 04:35 PM: same old same old.cut sevices that will make headlines,all the while keep handing out those raises and no layoffs.what a bunch of c-rap!the gov. workforce is immune to any recession or depression.they keep on,while we keep giving.fricken leeches sucking us dry. biil wrote on October 07, 2008 04:29 PM: give us a break gatorman, throw on a vest and a gun belt and go down on D St. in the middle of the night and see how you make out, see how gravy it is then,gravy train, please you idiot meth head bruce wrote on October 07, 2008 04:27 PM: need to cut the fat, i work in the govt, to many high up jobs getting paid triple the avg worker and we all wonder what they actually do except collect a fat check, it makes more sense to lay off higher ups, i am all for people making money but if lay offs have to happen they need to start high, they milk the system, harrahs is laying of gm's at there casinos, which makes sense, some of them make 500k and the avg emoployee makes 30k, by getting rid off the big dogs more people keep there jobs gatorman wrote on October 07, 2008 04:21 PM: why not fire the entire city work force, including the over paid cops, and hire new people at lower wages. I am sure there are plenty of very intelligent realters, mortgage brokers, contractors,etc. who are now unemployed who would love to get on board the govt."no layoff, always a pay raise gravy train". Read All Comments