Clark County and the leaders of its largest union agreed Monday on a proposal to trim annual cost-of-living raises to 1 percent from 3 percent in the current labor contract.
Both sides also agreed to limit annual merit pay raises to a maximum of 4 percent instead of the 5 percent called for in the contract.
County officials estimated that the reductions would save taxpayers $9.6 million a year through mid-2011.
If members of the Service Employees International Union Local 1107 approve the deal in a formal vote Friday, the revised contract would go into effect July 1. The union represents about 9,500 county workers.
A union leader said smaller pay raises were preferable to layoffs.
"We want to avert layoffs and maintain our public services," said Al Martinez, president of SEIU Nevada. "We want to do our part and our contribution in dealing with this issue."
The tentative agreement came after months of labor talks and on the day before county commissioners were to begin the task of balancing the budget while facing more than a $100 million shortfall in anticipated revenue.
"We're facing unprecedented economic trouble in our community and we needed unprecedented cooperation between the employer and employees," County Commissioner Rory Reid said.
In return for the union's concessions, the SEIU contract would be extended by a year to July 2011. However, after July 2010, the county could ask to renegotiate the contract again if the economy worsens, Reid said.
Recession is already battering the region, with the jobless rate climbing above 10 percent, and casinos and other companies laying off thousands of workers.
County officials estimate that each 1 percent pay raise in the SEIU contract costs taxpayers $4 million a year.
Cost-of-living adjustments are bargained into the contract to cover inflation as a rough average.
Merit increases were designed to be based on performance.
The current contract allows workers to receive as much as an 8 percent annual pay raise when merit and cost-of-living increases are combined. Under the new terms, the workers could get a 5 percent combined raise.
Martinez said most union members have expressed support for the reduced wage increases, realizing the bad economy is strapping the county.
Some members also observed that other unions were renegotiating labor contracts with the city of Las Vegas for lower pay raises, he said.
The SEIU is backing off from its earlier refusal to change the contract. In November, Reid asked the SEIU, police and firefighters' unions to consider revising their contracts to shrink labor costs and avoid layoffs.
Union leaders, in turn, asked the county to open its books to prove its finances were strained.
The county supplied the information but the SEIU balked at changing the contracts. That led to months of intense discussions.
Still, Reid said the union agreed to the cutbacks in a reasonable amount of time.
"For the union, it was a difficult decision," Reid said. "I think any process like that takes time."
Contact reporter Scott Wyland at email@example.com or 702-455-4519.