Las Vegas city officials should be ready to lay off workers if a deal cannot be reached with employee unions to slow the growth in personnel spending, City Council members said Wednesday.
In a motion that passed unanimously, Mayor Oscar Goodman said department heads should prepare lists detailing how they could cut staffing by 5 percent.
“We have to be in a position that, if we can’t come to some kind of accord, that we know how to proceed or at least have alternatives to consider,” he said.
Goodman had wanted the four unions that represent most city workers to be ready to enter contract talks by Wednesday. The unions, though, have hired a forensic accountant to verify the city’s financial projections, and one leader complained that the city appeared to be trying to rush the unions’ decision-making process.
“We asked for documents in October, and we just got them last week,” said Tommy Ricketts, president of the Las Vegas City Employees Association.
The accountant’s review will not be ready until the end of the month at the earliest, he said. But Goodman has scheduled another look at the situation on Jan. 7, which Ricketts said does not give employees enough time to assess the review.
“If you look at it, you could honestly say that they’re trying to put a lot of pressure on us,” he said. “That’s part of business.”
City projections show that without cost-cutting, the city will run up a $150 million shortfall over the next five years.
The problem stems from the downturn in the economy and the ensuing loss of expected tax revenue: sharp drops in the consolidated sales tax, which provides about half of Las Vegas’ $530 million general fund, which covers daily city operations.
Officials also expect property tax revenue to dip as declining property values start showing up on the tax rolls. Property taxes provide about 25 percent of the city’s operating revenue.
Some steps already have been taken to address the gap, including holding positions vacant, delaying capital projects and equipment purchases, consolidating some departments and cutting other non-labor expenses.
City officials have said they need the unions to accept cuts by, for example, accepting smaller annual raises than are allotted in labor contracts. Finance Director Mark Vincent has said the city needs to reduce the annual increase in salary costs by about 1 percent.
On Wednesday, City Manager Doug Selby said the city might look at offering early retirement incentives.
“Our discussions here are all about preserving our work force by lowering the cost of our work force,” Selby said. “Our fallback, our option that we could exercise … is a reduction in force. The city is working very hard to avoid that.”
In a letter to the City Council, Ricketts asked for patience as the unions go through the city’s finances.
“Once we receive that report we could then take action … possibly voting to open closed articles of our contract to help the city budget,” he said.
“The city spent many months doing its study and we only ask for a much shorter time to conduct our due diligence.”
Goodman said that “time is of the essence.”
“We don’t have much leeway,” he said, adding that “I do expect to have answers” on Jan. 7.
“If we don’t have answers — and this isn’t a threat — we have to be prepared as to what we’re going to do as a city,” he said.
Contact reporter Alan Choate at firstname.lastname@example.org or 702-229-6435.