Convention authority’s budget slices advertising and payroll

The Las Vegas Convention and Visitors Authority has a new spending plan, but the union that represents some of the agency's workers is balking at pay cuts to offset falling revenue.

The authority's budget for fiscal 2011, which begins July 1, will total $211 million, a decrease of 8.7 percent from fiscal 2010's original budget. Operating expenses account for $170.1 million of the budget, while reserves and transfers for debt-service funds amount to $40.9 million.

The plan represents a decline of $66 million, or 32 percent, when compared with fiscal 2008's budget. The authority's income from room taxes peaked in 2008 at $225 million, but will fall to $150 million in fiscal 2011, officials said. Most of the agency's funding comes from room-tax revenue.

For the second year in a row, the authority has allotted no new funds for building improvements. Debt in 2011 will increase to $40 million, up from $30 million in fiscal 2010, based on bonds issued for improvements to Interstate 15.

The authority's board members praised finance executives before approving the budget at a public meeting Thursday at the Las Vegas Convention Center.

"We feel like the assumptions that were made were very realistic and very reasonable, and they were based upon what we think is the best visibility that we have out there, and based on what we hope to happen," said Scott Nielson, a board member who's also executive vice president and chief development officer of Station Casinos. "I think it's a conservative, but very realistic, budget."

The authority reserved its biggest cuts for advertising, an area that Vice President of Finance Brenda Siddall said was central to the mission of the promotional agency. The authority plans to spend $71.8 million on advertising in fiscal 2011, down 17 percent from $86.5 million in projected expenses in fiscal 2010. It's the first big decrease for advertising since the recession began.

But pay cuts proved the most controversial budget detail, as the Service Employees International Union brought a contingent of members to the meeting to protest recommended compensation changes.

The authority's 2011 spending plan includes $40.3 million in personnel costs, down roughly 10 percent from $44.5 million in fiscal 2010. It achieves the decreases through unpaid furloughs, a freeze in hourly workers' pay at June 30 levels and a freeze on pay raises and bonuses for managers. The authority will also leave 88 unfilled positions -- 15 percent of the authority's authorized work force -- vacant in 2011.

Rather than cuts, though, the union has asked for across-the-board pay increases of 4 percent for members who work inside the authority's Las Vegas and Cashman convention centers. Plus, the authority's furlough program is the subject of arbitration hearings.

The authority has held three meetings with union leaders to discuss compensation changes. A fourth meeting is scheduled for Monday.

Siddall said the authority would have to lay off workers if it had to cancel its furlough program or give workers raises.

But union leaders pointed to other options.

Mike Ward, the group's research director, suggested the authority take the lead of Clark County and tap into money meant for debt-service funds to end furloughs and grant pay raises.

"Cutting back hours and cutting back wages hurts not only workers, but the neighborhood small businesses that cater to locals," Ward said. "Right now, local businesses need all the help they can get. Public entities like the LVCVA that collect tax revenue have the opportunity and the obligation to be at the forefront of our economic recovery."

Dave Peter, deputy director of contract negotiation for the union, said his group's perspective on the authority's financial health differs from that of the executives who wrote the budget. Both of the authority's convention centers are "booked strongly" through 2011, Peter said, and the number of hourly workers at both venues has "flatlined" for the last decade even as the authority added eight vice presidents.

"We're looking at cuts coming off the backs of hourly workers who've already given a 10 percent pay cut through mandatory furloughs," he said. "Management has not been given a base pay cut, but our workers have."

Las Vegas Mayor Oscar Goodman, who chairs the authority's board, said all of Southern Nevada's municipalities and private-sector employers must make difficult choices on employee pay. Given continued economic troubles, he added, it's "incomprehensible" that the union wants raises for its members when the authority is doing its best just to avoid layoffs.

"If that 4 percent increase were granted, you'd have to look at your colleagues and you'd have to say when they get their pink slip that you made a determination that it was more important to get an increase than it was for your colleagues to keep their jobs," he said. "I just don't believe you guys are those kinds of guys. If everybody does the right thing, everybody can keep on working. You do the wrong thing, and people will lose their jobs."

Contact reporter Jennifer Robison at jrobison @reviewjournal.com or 702-380-4512.