Southern Nevada Health District officials on Tuesday found themselves answering rapid-fire questions from a Clark County commissioner who wanted to know how they'll balance their books in the bad economy.
Commissioner Steve Sisolak pointed to the 5.5 percent pay raises that the district's employees will receive this year and asked how the district will cover the higher labor costs in the face of ebbing tax revenue.
Dr. Lawrence Sands, the district's chief medical officer, said that tax revenues are expected to drop by 10 percent next fiscal year and continue to slide for several years after that.
But he said the district had to honor the labor contract that called for 3 percent cost-of-living raises and a 2.5 percent step increase.
"We are all tied to our collective bargaining agreements," Sands said.
A union leader said that the district's finances were sound and that there was no reason to change the contract.
"Our members are aware of the economic downturn, but they are providing an essential service to the community," said David Peter, deputy director for the Service Employees International Union Local 1107.
The district offers vaccinations and clinics to the poor and monitors epidemics. It also does health inspections.
It is among the regional entities that Sisolak wants to scrutinize to see how their wages compare with the county's. If other agencies look too rosy, he plans to ask their directors to justify the disparities. The agencies include the Las Vegas Valley Water District, the Regional Transportation Commission and the Water Reclamation District.
Last year, the health district received about $21 million in county funding. Commissioner Lawrence Weekly, a health district board member, said that gives the commission the right to question Sands about finances.
Sisolak asked Sands how much of the district's $25 million reserve fund was used to cover overhead.
Scott Weiss, the district's administrative director, said they pulled about $7 million from the reserve. He said the district expects to have enough money to support its operations in the coming year.
Sisolak challenged that prediction. How will the district cover the higher wages next year when tax revenue is waning and the reserve is depleted, he asked.
"It's like putting out a fire with a can of gasoline," Sisolak said. "It doesn't work. I just don't think it was well thought out."
Weiss said they lowered step increases to 2.5 percent from 5 percent two years ago when the economy began to slump.
And despite the pay raises, the district's overall payroll costs fell by 4.7 percent from last year because they left about 60 jobs vacant, Sands said.
Sands said the decision to raise fees for vaccinations and clinic services had nothing to do with covering labor costs. The higher fees were needed to get the full federal reimbursement available and to pay the rising cost of vaccines and other supplies, Sands said.
Those who cannot afford the shots still will get them, either for free or at a lower price, he said. "Essentially we don't let the fees get in the way of providing the service."
Commissioner Chris Giunchigliani said the district should be mindful that raising fees on businesses for things such as inspections and licensing could really hurt. The fee increases might seem small, but other agencies could be raising their fees, too, she said.
"Sometimes we forget the business is getting hit in five different directions," Giunchigliani said.
Contact reporter Scott Wyland at email@example.com or 702-455-4519.