The Metropolitan Police Department's reserve fund is expected to dip dangerously low in fiscal year 2013 if county officials don't act within the next 18 months.
The department's $80 million surplus, which was built up over time, has been drained by economic conditions that forced cuts countywide. Those reserves could fall to $5 million, county finance officials told the Clark County Commission during a special budget hearing Thursday.
Finance officials said the reserve fund needs to be bolstered by $57.5 million.
"That's a huge hole that needs to be filled," said Commissioner Steve Sisolak, who chairs the department's Fiscal Affairs Committee. "That's the most immediate need."
Sheriff Doug Gillespie presented a tentative budget request last month to the Fiscal Affairs Committee for $515 million. That is a 2.87 percent increase from the current year to be used for operational costs affected in part by slumping property tax revenues. That could make the department the only law enforcement agency in the valley to expand its budget.
"The sheriff is putting together a plan," County Manager Don Burnette said. "If we don't address this issue, we'll have a real problem."
The county is facing a $42.5 million budget gap in fiscal year 2013. The county's ending fund balance is expected to shrink from an estimated $135 million in fiscal year 2012 to $92.5 million in fiscal year 2013.
"That's about as low as you can reasonably go without having cash flow issues," county Chief Financial Officer George Stevens said.
Burnette also reminded commissioners to renew the county's fire service district property tax override in 2014 or face a $12 million loss in revenues. The override was approved by voters in 1995 and authorized for a period of 20 years, set to end in fiscal year 2016.
The tax funds construction, operation and maintenance of four new fire stations and the reconstruction of one station.
Commissioners Susan Brager and Chris Giunchigliani cautioned that the overall county budget numbers were "very preliminary."
The intent of Thursday's meeting at the Las Vegas Valley Water District was to discuss the county's overall financial situation before submitting a budget to the state in April.
Commissioners and county management also brainstormed strategies about how to stabilize the organization, improve service through training and create ways to make it easier for businesses to do business with the county.
"It's showed us there's a stabilization right now coming into the next fiscal year," Sisolak said. "There are no big increases, and we need to prioritize where we're spending money moving forward."
The county's share of consolidated taxes will slightly increase by about 5 percent, from $270 million in fiscal year 2012 to a projected $278 million in fiscal year 2013. Nevada's C-tax distribution formula is the equation used to give allotments of state tax back to communities statewide. The tax pool is made up of six different taxes, including the cigarette tax, liquor tax and a government services tax collected by the Department of Motor Vehicles at the time a vehicle is registered.
Burnette said there are signs the county is beginning to emerge from the economic downturn and might be able "to thaw the hiring freeze" somewhat because of flatlining revenues and the C-tax increase.
The taxes are distributed based on a complicated formula involving population and property values.
Jurisdictions also receive a base amount that is adjusted according to the Consumer Price Index.
Commissioners recently sent a letter citing flaws in the formula to a legislative committee formed last year to examine whether the formula for the allocation of C-tax revenue is equitable to all governmental entities.
Contact reporter Kristi Jourdan at firstname.lastname@example.org or 702-455-4519.