North Las Vegas can’t afford the multimillion-dollar court defeat it suffered last month.
Faced with several years of projected eight-digit budget deficits — and with only enough in reserves for two months of expenses — officials admit the city can’t simply cut a check to cover about $25 million in back pay a Clark County District Court judge awarded the city’s public safety unions Jan. 21.
The big question raised by Judge Susan Johnson’s ruling is how the city might try to cover that tab in the future.
The answer, at least for now, might be to avoid it.
City leaders can appeal the ruling all the way to the state Supreme Court, a move with no legal guarantees that is almost certain to cost the city thousands in outside attorneys’ fees.
Interim City Manager Jeff Buchanan has said the city is still “weighing (its) legal options.” City Attorney Sandra Douglass Morgan did not return requests for comment on the likelihood of an appeal.
UNLV law professor Ruben Garcia said there is an outside chance that fighting the decision would pay off.
“The (District Court) opinion is a pretty straightforward statutory opinion,” Garcia said. “I think it’s going to be tough to convince the Supreme Court to take a different approach, but there’s certainly a chance they would interpret (the statute) differently.
“The question is, does the city want to get a fresh start out of this? Does the new leadership want to take a new approach?”
An appeal would buy the city time to negotiate a smaller settlement with its public safety bargaining groups, whose leaders have all expressed interest in helping the city avert a state takeover. Representatives with the North Las Vegas Police Officers Association have said they remain willing to settle their end of the contract dispute for around 40 cents on the dollar.
Garcia said the ruling could prove the best and only way to foster those painful, long overdue negotiations.
The decision holds that the cash-strapped city lacks the authority to freeze about $25 million in long-sought pay raises owed to union employees under collective bargaining agreements signed in the mid-2000s.
It finds that city leaders, who first forced the concessions under the terms of a city-declared “fiscal emergency” in June 2012, didn’t have the right to suspend city workers’ contracts in the absence of a “physical” emergency — a riot or a natural disaster.
If the city can’t find someone with a more generous interpretation of fiscal emergencies in the courtroom, Garcia said it can always hope the state Legislature will revise its own definition of the concept.
Given the choice, he suspects that legislators might find that prospect more appealing than backing a burdensome state takeover.
“It’s interesting, this whole question of ‘fiscal emergency,’ ” Garcia said. “It’s part of a bigger debate, but maybe, after a certain amount of time, the Legislature will feel there should be an exemption for this fiscal emergency.”
If the court-ordered payout came due immediately, the city would be able to pay less than half. Finance Director Darren Adair reports that such an outlay would throw the city into state receivership overnight.
Officials have eliminated more than 1,000 jobs and slashed $211 million from the city’s bottom line since 2008. They say further belt tightening wouldn’t come close to bridging the city’s anticipated seven-year, $152.6 million deficit.
City leaders have expressed optimism that a combination of more economic growth and shared municipal services can help the city pay down its structural deficit, but they haven’t articulated a plan that also would cover union workers’ back pay.
It remains unclear whether last month’s decision has shaken Mayor John Lee’s resolve to keep the city’s fire and police services separate from a preliminary deal struck to share around a dozen municipal services with Las Vegas.
Lee, who did not return requests for comment, has held that the city’s public safety services should remain autonomous, a distinct part of the city’s identity.
City public safety unions, meanwhile, have bristled at the prospect of being absorbed into any consolidated services model involving Clark County or Las Vegas.
Nearly 650 pages of internal emails obtained by the Las Vegas Review-Journal suggest that Las Vegas will be keeping an eye on union battles fought by its neighbors to the north, just in case.
“(Administrative Services Director) Ted Olivas did request that we take the NLV union agreements and review them,” Human Resources Director Dan Tarwater told his Las Vegas colleagues in October, “to see if our city staff would make any changes for future purposes that would be cost-saving measures.”
Contact Centennial and North Las Vegas View reporter James DeHaven at email@example.com or 702-477-3839.