Las Vegas fiscal year spending approved

Las Vegas officials approved a $455.2 million spending plan for the next fiscal year on Tuesday. While it includes an expected $4.2 million shortfall, it still presents a much rosier fiscal picture than was expected after the recession.

Even so, the city needs to keep identifying ways to cut costs, said Finance Director Candace Falder, since it will probably be about a decade before Las Vegas' revenues really recover.

"This looks very healthy, but we're not out of the woods yet," she said. "We really need to do what we've been doing the last three years."

Mayor Oscar Goodman praised city management as well as employees and the unions that represent them for making concessions and cuts that prevented much larger shortfalls.

"If anybody thinks we're not going to have to do it again, they're wrong," he said. "It's not getting better. Hopefully, we're in a holding pattern."

The city has $72.6 million in reserves that can absorb the fiscal 2012 shortfall. But continuing to rely on those funds will deplete them, Falder said, which would leave the city financially vulnerable and hurt its bond rating.

Las Vegas expects $451.1 million in general fund revenue in the next fiscal year, which starts July 1. That's down from $462.3 million in the current fiscal year.

Spending also is expected to go down. Expenditures were $460.4 in the current fiscal year, compared to the $455.2 million projected for next year.

The general fund pays the city's operating expenses, the largest chunk of which is wages and benefits. Before the recession, general fund revenues were as much as $100 million higher.

Since 2008, when the city first started responding to the recession, Las Vegas has eliminated 615 positions, including 270 layoffs, initiated buyouts, cut hours and programs and negotiated labor concessions with employees to save money.

No layoffs are planned in the next budget year, but another buyout program is scheduled.

Public employees have taken heat in the past for salary and benefit packages that some in the private sector find overly generous.

A city study found that in a number of cases, but not all, salaries were higher than comparable positions in other jurisdictions.

Some of the discrepancies have been addressed with lower salary scales for new hires, but the city is actually hiring for only a handful of positions.

There is some good news for city officials in the budget. Consolidated sales tax revenue is expected to climb by $5.2 million to $211.7 million.

Property tax revenue, though, is projected to plunge by $10.3 million to $91.5 million.

The budget can be amended if necessary during the year.

It will be eight to 13 years before those levies recover to pre-recession levels, said City Manager Betsy Fretwell.

"That is not an easy thing to overcome, especially when those make up 70 percent of your revenues," she said.

The budget assumes that concessions granted by the city's four employee unions stay in place, including pay cuts and the suspension of all raises.

Three of the four have agreed, but the city and firefighters have not reached a deal worth $6 million in savings.

Should a deal not be reached, one option the city has for reaching that savings goal is to reduce firefighter overtime, said Mark Vincent, the city's chief financial officer.

Separate from the general fund budget is spending on capital projects, which are funded by separate sources such as the fire safety initiatives tax, tax credits and savings from completed projects.

The 2012 capital budget is $447 million, $150 million less than the current year, and will be used to maintain city assets such as roads, sidewalks, medians and buildings, Falder said.

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