City of Las Vegas employees are being asked to accept 8 percent wage cuts in each of the next two fiscal years to help the city fill an ever-growing budget hole.
Without the concessions, city workers will be laid off, according to letters from City Manager Betsy Fretwell that were sent to the city’s four collective bargaining units.
"We are proposing a uniform reduction of wages from each group of employees," Fretwell wrote in the Nov. 20 letters. "This approach only works if every group participates proportionately.
"We certainly understand the magnitude of this request … absent the above salary reductions, significant service elimination and reductions, and corresponding reductions in force, must be implemented," she wrote.
In the 2011 budget year, a $69 million shortfall in the city’s operational budget is anticipated. Fretwell laid out a plan to make up that deficit in the 2011 budget year, which starts July 1, 2010, and in the 2012 budget year, which starts July 1, 2011, mostly by cutting wages.
"While at one time it was our hope the situation could be dealt with by slowing or eliminating growth in labor costs, the current reality is we must seek significant wage rollbacks," Fretwell wrote.
In addition, normal pay increases — cost-of-living, step raises, and merit or longevity pay — must be eliminated "without any provision to catch up at a later date," the letters state.
The pay cuts would affect all city workers, not just unionized ones, and would amount to $21.5 million in 2011 and $20 million in 2012. The remaining $27.5 million of the shortfall would have to be met with cuts elsewhere. The city’s general fund budget is a little less than $500 million, although that figure is expected to drop in coming years.
Without the cuts, Fretwell said, jobs will be eliminated, although she didn’t specify how many were at stake. City officials don’t know that yet, said spokesman David Riggleman.
"It depends on what the economy does. It also depends on what concessions the unions are willing to make. We don’t know until we can work out the math on this."
The city’s 2009 budget contained the equivalent of about 2,900 full-time positions.
Fretwell’s letter also set a deadline. Because the City Council must meet certain legal deadlines in preparing budgets, Fretwell said she had to have alternatives to present to city leaders at a special Jan. 7 meeting. Without an agreement, "we will have to present alternative options for the City Council … that primarily (rely) on reductions in force."
Four unions represent about 90 percent of city workers, and one round of contract changes already has been completed. Those revisions were aimed at slowing the growth of personnel costs, not reducing them.
City officials have been saying for a while that further labor concessions would be needed to avoid layoffs, but Don King, president of the Las Vegas City Employees Association, said he was "a little" surprised at the size of the proposed cuts.
"We had heard different figures," he said. "Until I got the letter, I didn’t know what they wanted."
The association is the largest of the four city employee unions. A meeting is scheduled Dec. 9 for the union’s members to weigh in on their preferred course of action, King said.
Leaders of the unions representing the city’s firefighters, city marshals and detention center workers could not be reached for comment Tuesday.
The city has been scrambling for more than a year to deal with an increasingly bleak financial picture that has taken shape since the economic downturn began.
The consolidated sales tax, which makes up a good portion of the city’s operating budget, has been in a continuous slide. Property tax revenue, the other main budget component, is expected to decline as well.
To date, the city has frozen or eliminated vacant positions, cut travel, delayed capital projects and equipment purchases and raised some fees in order to make ends meet.
Revenues have dropped faster than the city has cut costs, however. Without changes, the city would face a $430 million shortfall over the next five years, Fretwell said.
Contact reporter Alan Choate at firstname.lastname@example.org or 702-229-6435.View letters sent to city employees