More than 1,300 city of Las Vegas employees could receive a 3 percent hazard pay bonus in early July whether or not they were working during the coronavirus pandemic, the head of the city’s largest labor union said Friday.
“Everybody gets it, if you were at home or if you were working,” Las Vegas City Employees’ Association President DeAndre Caruthers said, adding that it was proposed in place of a cost-of-living increase.
The city reached a tentative one-year agreement with the union on May 14 that not only offered the one-time lump sum payout but also avoided the concessions that were recently contemplated to balance a city budget inflicted by steep revenue declines.
The city employees association board provided the details of the tentative deal to its members last week in an email obtained by the Las Vegas Review-Journal: no wage rollbacks, no concessions in fringe benefits and no changes to health insurance, sick leave, annual leave and other bargaining items.
City spokesman David Riggleman, citing ongoing negotiations, declined this week to answer questions about the total cost of the hazard pay bonus or how the city will fund it.
But Caruthers, when reached by phone, said he believed the city intended to bankroll the 3.23 percent bonus with federal coronavirus relief funding.
“From my understanding it is from the CARES Act that they’re going to pay that from,” he said.
The U.S. Department of Treasury has offered guidance to governments on how to appropriately spend its allocation of federal aid. Workforce bonuses are ineligible expenses, but hazard pay is eligible on a case-by-case basis, described as “additional pay for performing hazardous duty or work involving physical hardship” related to the coronavirus.
Robert Fellner, policy director for the Nevada Policy Research Institute, a conservative think-tank, said that the proposed hazard pay was indicative of labor group greed and it was “dangerous” to be “using money that is specifically meant to offset the economic hardship from the pandemic on such an egregious, harmful waste.”
“They’re using this to bail out their unions,” he said of the city, adding that it would set the wrong precedent for future talks.
But City Attorney Brad Jerbic, who noted the city did not ask him for legal advice on the negotiation, said he believed the bonus was “a smarter way to find a compromise.”
“I will say what I am aware of: Hazardous pay is better than a COLA because a COLA is permanent,” he said, referring to how the former does not affect pensions or compound over time.
No layoffs, at least for now
The proposed labor deal, which the city employees association board said will be voted on by union members starting later this month, represents a stark departure from how city officials have recently contemplated dealing with a structurally imbalanced budget.
Riggleman on Thursday again laid out the options the city has been considering in an email to the Review-Journal: “Either the bargaining units would be willing to accept what amounts to a 6 percent concession, or we would need a reduction in force (layoffs).”
“At this stage we are still in negotiations with the bargaining units, and where those budget reductions will come is still being worked through,” he wrote.
The city employees association is one of four bargaining units in the city. It has roughly 900 voting-eligible members but represents more than 1,300 employees, according to Caruthers.
On Wednesday the City Council unanimously agreed to submit a pared-back $572 million general fund budget to the state, balanced with cuts to personnel spending and by backfilling a shortfall with a special fund.
But there were no discussions of how layoffs or concessions might enter into the spending plan.
“My thoughts are, and I’ll just say this plain and simple: I’m just happy we were able to work out an agreement where no employees were laid off,” Caruthers said, adding that his focus now was to ensure the union could stave off job losses in the near future.
The union board wrote to its members that city management had advised them that the tentative agreement meant the city “would not have to move forward” with layoffs, at least initially. And the city planned to use its $119 million CARES Act allocation and “burn” through reserves, the board wrote, to maintain service levels for at least the remainder of the year.
City lawmakers respond
Avoiding layoffs and keeping city services running have been two major goals for city officials throughout the crisis, but city lawmakers said it was premature to offer meaningful comments on terms still under negotiation.
Councilwoman Victoria Seaman said the council had been briefed on the details of the tentative agreement as described to her by a reporter, and she underscored that it was her priority to balance the budget without layoffs.
“Definitely this would not be happening if we didn’t get that federal help,” she said about the bonus.
Councilman Stavros Anthony also said he could not provide comment on details of a deal still in flux, but “I can’t imagine we’re going to give bonuses to our employees because the budget is in pretty bad shape.”
And Councilman Brian Knudsen, also without delving into specifics, said that the city’s consideration to preserve jobs and services required it to be creative: “Leveraging CARES funding is one of the opportunities that we are going to review.”
The city is proposing to use the vast majority of its CARES Act funding toward a portion of its public safety payroll, Chief Financial Officer Gary Ameling told the council during a budget hearing Wednesday.