Bill would cut wage increases during severe economic downturns

CARSON CITY -- The city of Reno is preparing a bill that would allow cities, counties and school districts to suspend employee salary and benefit increases negotiated during collective bargaining during times of severe economic distress.

"Like we are experiencing right now," said Cadence Matijevich, who will be one of the city's lobbyists during the 2011 legislative session. "We have to provide some relief to local government. We are dealing with reduced revenue."

Matijevich said Wednesday that the problem has been complicated by the Legislature, which raided some local government funds during the special session in February and might try again next year.

Under the proposal, a school district or local government automatically would be permitted to suspend scheduled pay and benefit increases when revenue projections show its ending fund balance would be 8.3 percent or less of its budgeted expenditures.

The increases would be suspended until the next contract is negotiated. Contracts with Reno unions typically last two years.

The bill would be considered during the session of the Legislature, which will start in February.

But salary concessions already are being approved by local governments without the Reno proposal.

The Las Vegas City Council on Wednesday approved changes to its contract with the city employees union that saves more than $22 million over two years through wage and benefit concessions. City workers overwhelmingly approved the reductions.

Matijevich said that 8.3 percent or lower ending fund balance generally means the government would have a hard time covering future increases in spending.

She said the proposal would permit local governments and unions to release to the public details of the salary and benefit changes they are discussing in private contract negotiations.

Clark County Commissioner Steve Sisolak said the Reno proposal should be considered by legislators.

"I am in favor of anything that would increase transparency," said Sisolak, who has been pushing for reductions in pay and benefit increases sought by county employee unions.

"Things are not the same as they were three years or five years ago, and I don't know if they ever will get back to where they were."

But Sisolak said he does not know whether an 8.3 percent or lower ending fund balance should trigger the suspension of benefit increases. That could be debated by legislators.

The city of Reno plan does not go as far as Gov. Jim Gibbons' petition drive effort to make collective bargaining negotiations open to the public and subject to the open meeting law.

"Open negotiations are not necessarily in the best interests of local government," Matijevich said. "Florida is finding that out. Their negotiations are taking twice as long."

But she said that by having both the government and the employee organizations reveal their proposals, "taxpayers can judge" if the sides are being reasonable or stalling.

At this point, it is doubtful that the Gibbons petition to open collective bargaining to the public will succeed. He must secure 97,002 valid signatures by Nov. 9 or the proposal dies.

"We know it is an uphill battle," said Danny Tarkanian, who is leading the petition effort for Gibbons. "But we have hope."

Tarkanian said petitions are being circulated in Clark County, but he has had little communication with other parts of the state.

Under state law, a specific number of signatures must be collected in all three congressional districts. Only volunteers are being used to collect signatures, he said.

Matijevich said that at this point, Reno is the sole sponsor of the collective bargaining plan, but city managers around the state have been discussing the proposal as all are having trouble covering the cost of agreements with employee organizations.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.