Public employees scrutinized

In 2006, Clark County and Las Vegas faced off against the Las Vegas Police Protective Association over the Metropolitan Police Department’s labor contract. Officials didn’t want to give police the raise they wanted.

So, instead of a 26.5 percent raise over four years, the police force accepted something smaller — 21.8 percent.

It was the largest increase the county had ever granted for a police force that was already one of the best-paid in the nation and was lauded as necessary and good by elected leaders.

The climate is different now.

Since the onset of the worst recession since the Great Depression and the ensuing hit to local and state government budgets, all public employees in Southern Nevada face increased scrutiny of their compensation and pressure to give up wages or raises in order to balance shrinking budgets.

Some observers view that as a crucial moment for the future financial solvency of Southern Nevada’s public entities, which were already voicing concerns about the rapidly rising costs of benefits and wages even before the recession.

Others, however, think it will be business as usual once the economy gets going again, provided bargaining units stand fast by their contracts, even if it means accepting layoffs and furloughs.

Adding to the tension is the fact that budgets are being prepared now and are due in mid-April, making it decision time for public leaders and unions alike.

Clark County Commissioner Steve Sisolak is in the "crucial moment" camp.

"I think we need to look at the entire system," he said, describing the system as "out of control."

Benefit packages are usually more generous than the private sector, and employees receive essentially automatic raises each year, he noted.

"It may not be done all at once," Sisolak said of changes. "But if it can’t be done now, it’s never going to get done."

Nothing may be exactly what ends up happening, said Jeff Waddoups, a labor expert with the economics department at the University of Nevada, Las Vegas. Employee associations have reason to keep the contracts they have, even if it means furloughs or layoffs.

"I don’t think it’s the end of an era," Waddoups said. "I don’t think it’s a permanent situation.

"If the economy comes back … then I think the bargaining power will be restored. It might not be restored to where it was before because maybe we’ll never have those boom times again," he said.

Employees realize that, said Police Protective Association Executive Director Chris Collins. The PPA represents Las Vegas police officers and city of Las Vegas marshals.

"I think they’ve all toned down their expectations," he said. "We’re not asking anything other than just keeping what we have."

The police union has offered a proposal to the city that would save some money, as has the Las Vegas City Employees Association.

Collins said it’s frustrating dealing with the city because Mayor Oscar Goodman has taken a stance that an 8 percent cut in personnel costs is the only way to avoid layoffs. The city originally asked for 8 percent cuts in each of the next two budget years, but Goodman said recently that the city is now focused only on the fiscal year starting July 1.

"I’ve got nothing to prove it, but my opinion is this ‘all or nothing’ attitude is a union-busting move, or a move to break the contract to get lower salaries," Collins said. "It’s the first time I’ve been involved in anything like that."

The city’s not trying to break unions, Goodman said.

"I’m not saying bust the unions," he said. "What I’m trying to say is everybody has to be reasonable so we have a balanced budget, keep all the employees and be able to keep all the services that we render."

Though he didn’t know specifics, he said he was told that "progress is being made" in talks with the city’s bargaining units. He said the 8 percent reduction could come from wage cuts, benefit cuts, furlough days or some combination of those options.

"Any way that we can reach the commonality as far as being able to accomplish our goals," Goodman said. "Eight percent is my goal. That’s the council’s goal."

The current slump is the first time a lot of local leaders have had to deal with anything other than rapid revenue growth.

The end of the boom meant declining tax revenues, forcing cuts in spending. Generally, officials went after the easy stuff first: canceling or delaying capital spending, holding positions vacant, instituting hiring freezes and trimming expenses wherever possible.

Several employee associations agreed to changes in their contracts as well. Mostly that meant reducing the rate of wage growth, not cutting costs, and it turned out not to be enough.

Clark County, facing a $200 million budget deficit, is considering layoffs. Las Vegas predicts a $70 million budget shortfall next year and wants employees to accept 8 percent cuts in order to prevent layoffs.

North Las Vegas decided to lay off 204 employees by June. Henderson has fared better than other local governments, but is still shedding positions and looking at a shortfall of more than $50 million.

Officers in the Metropolitan Police Department, which is funded by Clark County and the city of Las Vegas, gave up a cost-of-living raise last year and might do so again. Positions in the department are also being kept vacant to save money. A new police union contract is being negotiated.

In the Clark County School District, three of the four employee unions have offered to take furloughs to avoid layoffs, although the teachers union — the largest — is withholding support for the idea. Superintendent Walt Rulffes has said salary cuts would solve the district’s budget crisis, but layoffs are more likely.

It might seem strange that a bargaining unit would prefer layoffs to pay cuts — after all, isn’t it better to have a job that pays less instead of no job at all?

That’s not how union leaders view the situation, Waddoups said.

They’re looking at the "median worker" — someone who has years of service and seniority — and the contract structure that’s evolved over a long period of time.

"It’s difficult for them to be in a position of giving back wage increases," Waddoups said. "That’s why I think people in the unions gravitate toward, ‘If we have to tighten our belts, let’s do furloughs. Let’s do layoffs, even.’

"It has the same effect fiscally, but it doesn’t have the effect psychologically of losing something that was hard-fought."

Furthermore, he said, "the median worker isn’t going to get laid off. It’s the ones who just started, the younger workers" because more senior workers have the ability to bump out those less senior and stay employed.

City of Las Vegas electrician Mark Hrabley is one of the employees about to be laid off, although he’s maintaining some optimism that an alternative deal can be reached.

He said he understands the viewpoint of more senior workers who don’t want to give up wages.

"They’ve been there 10, 20, 25 years," he said. "If they take a pay cut, it’s going to affect their retirement."

That’s why there’s more support for people taking furlough days, or working a four-day week instead of five days.

"The hours will come back over time," Hrabley said. "If you give up pay, you’ll probably never see it again."

While he understands the thought process, he’s still the one feeling the sting of an impending job loss.

"I would rather lose 10 percent than 100 percent," he said, and many of his co-workers feel the same way. "On the other hand, some of these guys are extremely selfish. They don’t want to give up a little to help the general cause."

There was a time when generous wage and benefit packages were thought to be necessary to attract quality public sector workers to Nevada, said John Restrepo, a consultant who regularly analyzes local government finances.

Those salaries for state and local government workers are among the highest in the country, according to a study commissioned by the Las Vegas Chamber of Commerce. Average pay for a state or local government employee was $55,700 in 2008, or 114 percent of the national average. That is not the case with public school teachers, whose average pay is below the national average.

As Southern Nevada grew and prospered, the need for those inducements faded, but the inducements — annual raises of as much as 8 percent, covered health insurance and retirement contributions, for example — stayed.

"They grew as part of the boom culture" over two decades, Restrepo said. "We just developed an unsustainable local government compensation structure that was OK while the boom was going, but it was based on the premise of unending boom.

"A receding tide exposes everyone who’s not wearing a bathing suit."

Contact reporter Alan Choate at or 702-229-6435.

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