Henderson tightens budget belt

Since 2009, the city of Henderson has cut more than $105 million from its budget in response to one of the nation's worst economic downturns.

Tuesday night, the City Council carved away $10 million more through staff reductions and other measures in a last-ditch effort to avoid cutting services.

Henderson faces projected shortfalls of $13 million for the fiscal year starting July 1 and $14 million in 2013, but this fifth round of employee buyouts since 2009 is likely the last.

"The savings were not as great as they were at the beginning," said Mayor Andy Hafen, noting that 90 percent of positions that were bought out in early staff reductions remain unfilled. That percentage dropped to 73 percent in the fourth round of buyouts.

While Hafen worried the city wasn't getting a big enough "bang for its buck," Councilman Sam Bateman said the city couldn't function with fewer employees.

"I'm guessing we're down to the bone in staff reductions," he said.

If the economy doesn't improve, he said, services probably would be on the chopping block the next time the city has to cut spending.

The council agreed to set aside $5 million to fund the buyouts but with the caveat that staff would have to show at least 90 percent of the vacated positions remain empty.

The program, which pays those who accept a buyout two weeks salary for every year of employment with the city, has helped the city balance the budget while maintaining services.

Officials have called the program a "useful tool," but Bateman isn't the only one who worries about the consequences. More than 220 employees have opted for the buyouts, shrinking the city's workforce to about 1,870 employees, Finance Director Richard Derrick said.

The buyouts, he said, are saving the city in the neighborhood of $550,000 per biweekly pay period.

Derrick said the "ongoing financial challenges" have prompted the city to implement additional budget-slashing strategies to "ensure the long-term financial sustainability of the city."

The council also saved an additional $5.3 million through operational changes and the permanent elimination of 22 vacant positions, Derrick said.

Contact Doug McMurdo at dmcmurdo@reviewjournal.com or 702-224-5512.