County approves budget with no layoffs despite shortfall

Clark County commissioners Monday approved a final budget for the next fiscal year with no layoffs or wage and benefit rollbacks despite struggling with a hefty shortfall.

But several county leaders said layoffs and cuts in compensation are still sure to happen in the coming year because the county's funds are so depleted.

The county had to submit a balanced budget to the state by June 1 but can adjust it later as long as no more money is spent, officials said. The 2010-11 budget includes a $1.2 billion general operating fund. The new fiscal year starts July 1.

The county is bargaining with its firefighters union and its largest employee union in the hope the two unions will make cost-saving concessions that could be applied to the budget.

The county avoided tougher cost-cutting measures by pulling money from a reserve fund, transferring money from capital projects and getting a chunk of federal funding.

Commissioner Steve Sisolak decried what he called budgetary "tricks" and said the county was putting off tough decisions needed for true financial recovery.

"I think we're playing an accounting game," said Sisolak, who voted against the budget. "I don't think enough has been done."

Sisolak said he wanted to see a hard estimate of projected layoffs. He noted that department heads were asked to draft plans for 8 percent cuts in personnel.

Submitting a budget with no layoffs planned for the coming year could send unions the message that the county's financial trouble is not so serious, Sisolak said.

County Manager Virginia Valentine said she hopes the unions do not view the budget that way. The county has managed a temporary fix, she said.

"There are going to be more layoffs," Valentine said. "And we are going to have to have some concessions on our labor contracts."

Representatives from the International Association of Firefighters Local 1908 and Service Employees International Union Local 1107 could not be reached for comment Monday.

County officials estimated last month that closing the remaining $57 million shortfall in the general fund would require laying off 530 people or reducing wages and benefits by 14 percent.

Earlier this year, the budget gap had grown to $138.5 million as tax revenues sank during the prolonged recession. Property taxes and the consolidated tax -- which includes a sales tax -- generated their lowest revenues since 2006.

The county diverted $55 million from a capital fund and $47.3 million from the general fund reserve. It received about $20 million in federal money as a reimbursement for work in the Wetlands Park.

The reserve will fall to $77.1 million 6 percent of the general fund, putting it below the optimal 10 percent, said George Stevens, county finance director.

A drained reserve leaves the county with a slimmer buffer to cover contingencies and leaner revenues, officials said.

Commissioner Rory Reid agreed that the county cannot run on such a depleted reserves and must snip labor costs.

"We're not done," Reid said of the budget. "This is a snapshot."

A few commissioners argued that the county has done much to contain costs in the past two years.

They pointed to the roughly 750 jobs left vacant, furloughs, voluntary separation and 60 people laid off from jobs paid for with the general fund.

"I think we've been very prudent," Commissioner Chris Giunchigliani said. "I think our goal is to not add to the unemployment list out there."

The county has frozen several hundred jobs paid for with the general fund, she said.

Also, the county has laid off about 185 people when departments funded with users fees -- plus the impending 60 layoffs from University Medical Center -- are included.

Commissioner Tom Collins said the county should not depend too much on layoffs for balancing the budget.

"If our revenue is down 20 percent, we don't lay off 20 percent of our work force," Collins said.

Collins said the county's financial officials keep a larger reserve than he sometimes thinks is necessary. The county has been vigilant in shoring up the reserve, which it now can tap to help save jobs, he said.

Commissioner Larry Brown warned against dipping too much into capital funds to plug budget holes, saying it makes the canceled projects look as if they were not needed.

He echoed his past statements that labor costs must be trimmed.

"If we keep putting Band-Aids on it, we're missing the opportunity for long-term stability," Brown said.

Commissioner Susan Brager said the county is in a bind partly because it shoulders burdens that other local governments don't, such as UMC.

The county paid the hospital $140 million from its general fund last year, though the patients come from everywhere in the valley, not just the unincorporated areas, Brager said.

"UMC is a $140 million monkey on our backs that everybody uses," Brager said.

Commissioner Lawrence Weekly said any layoffs must be done fairly, and not like an earlier round.

He was referring to the county laying off or demoting a group of managers several months ago who were mostly minorities.

The county should look carefully at how it can eliminate jobs, especially where there is duplication, Weekly said.

Still, commissioners would need far more than one hourlong hearing to fix the problems that have accumulated over the years.

"We're paying for a lot of what's been done in the past," Weekly said.

Contact reporter Scott Wyland at swyland@reviewjournal.com or 702-455-4519.