LVCVA forced to cut budget

A $231.2 million budget for Las Vegas' official boosters envisions 12 months of spending cuts, a hiring freeze and a ban on overtime.

And it still might not be enough to prevent more drastic cutbacks for the Las Vegas Convention and Visitors Authority, the group responsible for attracting visitors to Southern Nevada was told Tuesday.

"This has been the most challenging budget we ever put together," said Brenda Siddall, vice president of finance for the authority.

Siddall presented the authority's board of directors a preview of the upcoming budget, which is 11 percent smaller than the budget for the 2009 fiscal year, a period during which the authority's cut of the room tax fell $65 million short of expectations.

"We've had to adjust in ways we'd never dreamed of," said board member and MGM Mirage executive Chuck Bowling.

The authority will save $23 million in the upcoming year as a result of a decision to suspend work on a proposed $890 million renovation of the Las Vegas Convention Center.

It will save $2.4 million on salaries, wages and benefits across all departments, thanks in large part to a hiring freeze that covers 50 open positions and tight overtime restrictions, Siddall said.

The authority even shaved nearly $3.3 million from the advertising budget, leaving a budget of $86.5 million to advertise Las Vegas to the outside world.

The budget projection assumes the average daily room rate will fall 2.2 percent further in the 12 months beginning July 1 and occupancy during that period will be 80 percent, well below the low- to mid-90 percent occupancy Las Vegas enjoyed during the bygone boom times.

"We assume those declines will continue through the summer," Siddall told board members.

Siddall says she expects the declines to become less steep in September, which will be one year since the Las Vegas economy went into a nose dive.

It doesn't mean visitation will start to increase, it just means the declines will slow down.

"This September we think is not going to be as steep of decline as last September," she said.

Still, some board members from major resort companies wondered if the 2010 fiscal year projections were too optimistic.

Tom Jenkin of Harrah's Entertainment indirectly asked Siddall if there were plans to lay off some of the authority's 522 employees if the economy worsens.

"Have we thought about a staffing plan?" Jenkin asked Siddall.

She responded that authority officials are developing "economic triggers" that would prompt them to fill open positions.

"I was referring to it going the other way," Jenkin replied.

Board member Keith Smith of Boyd Gaming also cautioned against forecasting that numbers will turn around in the next 12 months.

"We don't see them getting worse," Smith said. "The problem is we don't see them getting better."

The budget presentation was an informational item only. There will be a public hearing May 21 at the convention center to discuss the proposal before the board can vote to approve it.

In addition to looking forward to the 2010 fiscal year, the authority approved a revision to the 2009 budget.

It marked one last downward adjustment to the amount of expected room tax coming in to the authority. Siddall told the board the authority would take in about $178 million in room taxes for the fiscal year, a decrease of 6.3 percent from the last revision and 26.7 percent less than Siddall expected at the beginning of the fiscal year.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.