It’s crunch time for North Las Vegas budget

North Las Vegas city staffers have two weeks to come up with a new budget-cutting plan to avoid a financial emergency and a potential state takeover of the cash-strapped city's finances.

During a bleak Wednesday night meeting, City Council members directed staff to bring back a plan that makes $8.6 million in cuts to the fiscal 2012 budget.

It's "a pretty grim picture," said Al Noyola, acting director of administrative services and finance for the city. "There's not a whole lot left" to cut.

The City Council could be asked to choose from options including the following:

■ Privatizing the city's utility functions and selling the city's new $300 million wastewater treatment plant, which is caught up in a federal lawsuit.

■ Laying off the city's remaining nonpublic safety staff of up to 167 people, which probably would result in the closure of parks, pools and other city facilities.

■ Selling the yet-to-open, $130 million City Hall and leasing it back from the buyer.

■ Outsourcing parks and building maintenance and legal, payroll and custodial services.

■ Refinancing existing bond debts.

The city also could raise property taxes on its residents, who already pay the highest taxes in the valley.

North Las Vegas' original 2012 budget, approved in May, included cuts to cover a $30.3 million shortfall. The cuts included slashing 258 positions across city departments, including those of police officers and firefighters, unless concessions could be reached with the city's employee unions. Mayor Shari Buck, who has said she would not support more cuts to public safety, was the only council member to vote against the budget.

Police union officials said the loss of more officers would leave the city unsafe and posted billboards around the city stating so. Police Chief Joseph Chronister said that his department was already understaffed and that layoffs would make it harder for police to do their jobs.

The 2012 budget was thrown into disarray last week when the Police Officers Association won a court decision that prohibited the city from proceeding with layoffs of nearly 40 union members, including a dozen police officers. The city's firefighters union also has filed a lawsuit to halt the layoffs of 35 of its members. Because the firefighters union contract, as amended earlier this year, contains language nearly identical to that of the police officers union, the city expects to have to add those positions back to its budget too. That means North Las Vegas has to look elsewhere for the $8.6 million it would have saved with those public safety cuts.

Otherwise, the city would have to declare a severe financial emergency, which would trigger state intervention into the city's financial management.

The city already has been talking informally with officials from the state Department of Taxation. Those officials have promised that if they have to take over the city's finances, their first step will be to raise taxes on residents "to the maximum extent" allowable under the law, Noyola said.

"I sure hope there's a pot of gold because I haven't seen it," he said.

Buck said the city will do what it must to avoid state intervention.

"We made a commitment to the state and to our legislators that we were not going to let" the state take over, she said. "We're not going to let that happen."

Councilwoman Anita Wood responded: "You're certainly more positive than I am, mayor."

Councilman Robert Eliason suggested that someone from the Department of Taxation speak to the council about what state intervention would look like.

"We need to have a public discussion about this," he said. "We've got to start ... working on the facts and start working together to pull this thing back together."

But the city must act quickly. Fiscal year 2012 started July 1. For every week cuts are delayed, the city falls another $165,000 into the hole, officials said.

"Hopefully, we'll be able to come out of this and find solutions to keep the city functioning," Noyola said.

The city has an ending fund balance of $7.2 million -- about 4.8 percent -- which is enough to make one payroll.

"We don't have a lot of time," said Maryann Ustick, acting city manager.

The city has experienced plummeting property tax and other revenues during the economic slump. It has gone through several rounds of budget cuts since late 2008 and eliminated or frozen about 1,000 positions.

In June, 188 workers were laid off. Another 44, all North Las Vegas Detention Center workers, were let go in October after the jail lost about a third of its inmates to a new lockup for federal inmates in Pahrump.

This city employs about 1,300 people.

Contact reporter Lynnette Curtis at lcurtis@reviewjournal.com or 702-383-0285.