City to cut 31 positions in April

The slumping economy has led to 31 positions being eliminated at the city of Las Vegas as revenues continue to tighten after almost a decade of growth.

The city already had to fill a $21.5 million hole in the current budget year by holding positions vacant and dipping into reserves.

Now there's a shortfall in the Building and Safety Enterprise Fund because of a housing construction slowdown. The fund is absorbing the layoffs among its staff.

"We're not in a crisis mode, even though laying off 31 people is a very unpleasant thing to have to do," said Las Vegas finance director Mark Vincent. "But we're not laying off hundreds and hundreds of people."

The building and safety fund revenues come from fees on builders. The fund's employees check construction plans and perform inspections in the field.

The building and safety fund was formed in 2001 and in some years had revenues upward of $19 million because of booming construction. But, as a city report states, "the last two fiscal years have witnessed a 36 percent reduction in B&S revenues with no end in sight."

Future activity can be gauged by development applications, and there's not much in the pipeline, said City Manager Doug Selby.

"It just plummeted," he said. "We don't have any general fund money to bail this function out, and even if we did, the work just isn't coming in."

The layoffs take effect in April, when other cost-saving measures also will be put into place, such as:

• Community and recreation centers will be closed on Sundays.

• Some leisure service events and events requiring overtime will be eliminated.

• An unspecified number of hourly, part-time positions will be cut.

• Reductions will be made in travel, consultant and supply budgets.

Those cuts are considered short-term steps to stave off additional layoffs.

Projections call for revenues to remain tight for the next two years, which means city leaders will be scrutinizing bigger-ticket items such as capital projects, employee raises and, possibly, more job cuts. The city hasn't had to lay off workers for at least a decade, a city spokesperson said.

"We think it'll be rough days ahead in terms of revenues for all local government," Selby said. "We want to kind of recalibrate the organization so that we're ready for that."

At the heart of the situation is the consolidated sales tax, which makes up about half of the city's general fund budget, which is about $530 million this year.

The past six quarters have seen "dismal" revenues from the "c-tax," and so far this budget year collections have declined 2.5 percent compared with the same period a year ago. Even in the shock after the Sept. 11, 2001, terrorist attacks, the city's sales tax revenues climbed slightly.

The meltdown in the housing market last year ended Las Vegas' surge in sales tax collections, which showed double-digit growth from 2004 to 2006. But the drop is not related only to construction, Vincent said. People are spending less almost across the board, he said.

"I think a lot of people were taking advantage of home values ... a lot of it was credit-related. Which explains why it fell off the table," he said. "People couldn't trade up anymore, and now they're figuring out that they can't even afford what they have."

The scenario isn't expected to change much before 2010 or 2011.

"We're not sure we've hit the bottom yet," Vincent said.

A budget hearing before the Las Vegas City Council has been scheduled for March 31.

Contact reporter Alan Choate at achoate@reviewjournal.com or (702) 229-6435.