LV begins belt-tightening

Las Vegas moved forward Monday with a package of cost-cutting measures aimed at balancing the city’s budget in five years while also avoiding layoffs, provided that employee unions and the city can agree on how to keep personnel costs from outstripping revenues.

City leaders are trying to plug a deficit estimated at $150 million over the next five years caused by the increasingly sluggish economy, which has meant a reduction in the city’s tax revenue.

At the end of a daylong workshop, City Council members approved steps that would cover about $124million of that shortfall, with the rest being made up by reserves.

Officers from the four unions that represent 90 percent of the city’s work force said they’re willing to talk with city leaders but didn’t make any specific promises.

And while the meeting was cordial, union members in attendance made it clear that city officials would have to make a very convincing case if workers are going to accept lower salaries in the future.

"This is going to be a difficult sell to the people I represent," said Chris Collins, executive director of the Las Vegas Police Protective Association, which represents Las Vegas marshals.

And it can’t be a one-sided deal, said Bruce Snyder, general counsel for the Las Vegas City Employees Association. People are concerned about job security, and the city will have to take steps in any agreement "so that it attracts our members."

Council members approved the following steps:

• Eliminating $4.9 million of vacant positions and $1.9 million in non-labor costs.

• Maintaining the $20 million in cuts that have already been made.

• Delaying capital projects for a year that would require additional staffing or maintenance once complete.

• Increasing some fees the city collects, although those would have to be approved by the council separately.

The main component, though, will be slowing down growth in wages by revising the union contracts. Salaries and benefits make up about 75 percent of the city’s $550 million annual operating costs.

Wage growth is 4.7 percent a year, said finance director Mark Vincent, and it needs to be trimmed to at least 3.8 percent. That would save the city $49 million over five years.

"There’s no scenario I’ve run that balances the budget without considerations from the bargaining units," Vincent said.

Snyder said the city employees association’s analysis tracks with Vincent’s — that roughly a 1 percent reduction in salary growth would keep the city from having to cut jobs to make ends meet.

How that cut will be achieved hasn’t been determined yet. The city had proposed reducing the annual "step" increases to 2.5 percent from 5 percent, but annual cost-of-living allowances, or COLAs, also will be looked at, said city spokesman David Riggleman. Annual cost-of-living increases range from 3 percent to 4 percent among the city’s employee groups.

"It could come from reduction in COLA. It could come from reductions in the step increase, or any combination thereof," Riggleman said. "That rate of growth has to slow down."

The unions will scrutinize the city’s numbers further to make sure they agree with the city’s case, Snyder and Collins said.

Council members and Mayor Oscar Goodman, meanwhile, urged the parties not to become confrontational.

"Labor costs put us in this situation, and labor costs will be part of the ultimate solution," said Councilman Larry Brown.

"We all better work together or we will be casualties," Goodman said. "It’s going to be very difficult to accomplish this on a piecemeal share. If there’s hard-nosing on this, it’s going to be disastrous."

He asked for an update — and preferably an agreement — at the Dec. 3 City Council meeting.

City Manager David Doug Selby said that’s probably not enough time. In his presentation, he set a Feb. 1 deadline to have a deal in place.

If there’s no progress by then, "our options at that point are primarily reductions in services and programs," Selby said.

"Was that a nice way of saying people are going to lose their jobs?" asked Councilwoman Lois Tarkanian.

"Yes," Selby answered.

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

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