There were many reasons given for the city of Henderson’s incredibly tone-deaf decision to hand out “professional allowances” to 66 top city managers while officials are simultaneously trying to persuade voters to consider a property tax increase and cutting hours at the Heritage Park Senior Facility.
The city’s top spokesman, Bud Cranor, said the allowances — which totaled $43,950 in April and May — were to make up for cost-of-living-increases, car allowances and other pay that was eliminated or reduced because of the recession.
Mayor Andy Hafen, who knew about the program in advance and apparently had no objections, said the allowances were a gift from the city to its employees. “This was almost a ‘thank you’ for giving up so much and it did seem like a nominal amount,” Hafen told the Review-Journal’s Arnold Knightly. “But now that we see [the budget shortfall] is even worse, and of course it’s not a very good message to send out there, I was very happy that we have suspended them.”
Two things about that, by the way: First, Hafen knows full well that the allowances were being given out at the same time city leaders were holding town hall meetings to describe the city’s budget woes to residents, in preparation for asking them to approve a property tax increase. And part of those meetings were discussing cuts that were ultimately made to parks and recreation facilities, including cutting the senior center hours and eliminating a Saturday lunch program for old people, as well as charging them $1 more for regular meals and to use city facilities.
Second, Hafen describes the situation as if he’s but an innocent bystander witnessing events over which he has no control. But as the elected mayor of Henderson, Hafen could have stopped this wrong-headed idea before it got started, under the very reasonable and entirely defensible idea that telling people the city has no money while at the same time handing out bonuses to well-paid top employees is an absurd and hypocritical contradiction that’s likely to help torpedo your bid for a tax increase!
One does not need to be Nostradamus to see that, right?
But there’s now yet a third explanation for the decision, from the man who came up with the idea in the first place, City Manager Jacob Snow. During a visit to the Review-Journal’s editorial board on Thursday, Snow said he devised the allowance plan to prevent Henderson employees from joining a union.
“I did that because I wanted to save the city money long-term,” Snow said.
See, if those top managers joined a union, like the vast majority of the city’s 1,800-person workforce, they could collectively bargain for their salary and benefits, and to avoid cuts in tough times. (Indeed, according to information provided by the city, union employees gave up concessions equal to about 2 percent of their pay in the last two years, while pay for non-union employees has been reduced by 6 percent to 11 percent.)
Message: Live better, work union!
So, to prevent fomentation for unionization, Snow decided to induce top employees to stay non-union with monthly gifts of between $250 and $550. Had the program continued, it could have cost taxpayers around $260,000, based on the amount disbursed in April and May. That’s more than Snow’s annual base pay of $225,000, although with his own $750-per-month “car allowance” (which is still being paid, per his contract with the city) his compensation rises to $234,000.
Whether top Henderson employees will now decide to form a union is not entirely clear. (Knightly reported that some managers elected not to accept the extra pay, given the city’s financial condition.) But whether they do or they don’t, it’s not clear that a few extra dollars for the top people in city government would have been the deciding factor.
Seriously, how about ice cream Fridays instead? At least then you could invite poor seniors to join in and share the wealth!
Too harsh? Not really, given that the city has not backed off its property tax increase plan, which may ask voters to raise taxes up to 20 cents. And the truth of the matter is, Henderson actually has (or perhaps had) a good case to make. Consider:
• The city’s “expenditure budget” has decreased during the last five years, while the population has increased.
• There are 6.8 employees per 1,000 Henderson residents, the second-lowest ratio in the valley. (North Las Vegas, which has seen hard times financially, has the lowest at 6.4 per 1,000 residents.)
• The city’s share of consolidated tax has fallen from a high of $103 million in 2006 to $86.3 million today. Consolidated tax makes up 41.5 percent of the city’s revenues.
• Property tax has fallen from a high of $85.7 million in 2009 to just $58.5 million today. (Property tax makes up about a quarter of the city’s budget.) But because of property tax caps enacted in 2005, the tax can increase by just 3 percent on residential property per year, no matter how much home values increase. That’s why the city needs a vote of the people: to override the tax cap.
• The city has maintained one of the lowest property tax rates in the state, at 71 cents per $100 of assessed valuation. That’s lower than Reno (at 96 cents), Las Vegas (at $1.06) and North Las Vegas ($1.16). Even if a 20-cent increase were to pass, Henderson would still be one of the lowest taxed cities in the state.
• The city has cut its budget, eliminated positions, eliminated cost-of-living pay for non-union employees and wrangled concessions from union workers, eliminated rollovers of sick leave and vacation time (for non-union workers) and increased the amount employees pay for health care and retirement.
In short, Henderson does more with fewer people despite a rising population and lower taxes. And as a Henderson resident myself, one who formerly lived in Las Vegas just east of Summerlin, I can testify that I like living in Henderson much more.
So I’d normally be sympathetic to city officials when they make their case for more money. But if city leaders are OK with the idea of padding the pay of already well-paid employees at the same time they’re cutting services for seniors, a person cannot help but be skeptical that the new infusion of cash will be used properly.
That may be part of the reason Henderson officials are pledging any money raised by any tax increase will not be used for employee salaries or benefits, and will be sequestered in a special fund to be used only for capital improvements, such as roads, traffic control, stormwater, vehicles, facilities, parks and trails and information technology. There’s a deficit of $17.1 million in those areas.
City officials already have said they won’t put a potential tax increase on the November ballot. (That would be an act of monumental stupidity anyway; the debate over the Education Initiative and removing the constitutional cap on mining taxes will leave most voters with taxaphobia.) Instead, it would not be surprising for the city to put the measure on the municipal ballot of 2015, when far fewer voters come to the polls.
The Henderson library district in 2012 tried asking voters for a much smaller tax increase (2 cents) with an even better record of fiscal management without any of Henderson’s recent stumbles. It still failed by about 10 percent, although it was on the ballot in a presidential election with higher turnout. A bid by the Clark County School District to build new schools was rejected that same year by a nearly 2-to-1 margin.
Henderson was starting from behind on its best day in asking voters for more money. Now, Allowance-gate and the senior cutbacks have put the city even further behind. “We’ve got more work to do before we bring a ballot question,” Snow said at the editorial board meeting. Indeed.