Review criticizes funding cuts for police in North Las Vegas

North Las Vegas decreased funding for police at an "alarming rate" in recent years while increasing other expenditures, according to a preliminary outside financial review prepared as part of contentious contract concession talks between the cash-strapped city and its police union.

The review, completed by Mark Alden, an accountant and a member of the higher education system's Board of Regents, also said the city's budget shortfall "absolutely does not require further concessions from the North Las Vegas Police Officers Association" and recommends that the city "needs to revisit its budget process and reassess the policy priorities in order to 'serve and protect' " its citizens.

In a written response, the city disagreed with the findings, saying they included several errors and "improper analysis." The review in places incorrectly factors in capital or restricted funds where it should be based only on operating funds, the city said. In fact, both general spending and spending on public safety have decreased in North Las Vegas in recent years, the city said.

It was unclear how the review, submitted to the city earlier this month, would affect concession talks with the union. As part of a late 2010 agreement between the city and union during a previous round of talks, the union agreed to sit for more talks if a "mutually agreed upon third party" indicated the city's budget shortfall would require further concessions.

Jeff Allen, an attorney for the union, said the union still is committed to working with the city, though it is "not legally obligated in any way" to do so.

"We're never going to shut the door on meetings, though there is certainly a trust problem right now," he said. "The city is cavalier about breaking the promise they made."

He pointed to part of the 2010 agreement, signed in December, in which the city agrees to "no layoffs for 18 months." But the city, which faces a $30.3 million shortfall in fiscal 2012, last month adopted a budget that includes slashing 258 positions across city departments, including those of 18 police officers, unless concession agreements are reached with its employee unions. The positions to be eliminated also include those of 40 firefighters. The firefighters received pink slips earlier this week, and, according to the police union, officers will start receiving theirs Monday.

If those pink slips go out, Allen said, "the union would have a breach of contract claim. There would be a legal option that could be explored."

But city officials said the agreement, including the requirement of a third party financial review, simply lays out a set of procedural steps the city must follow before it starts layoffs.

Councilwoman Anita Wood was shocked when she read Alden's review, she said.

"He is espousing the POA's view," she said. "It makes no sense. Apparently this is the auditor they selected, and now we are very suspicious."

The union chose Alden to complete the review, but the city agreed to the choice. Alden said he charged the union a flat fee of $15,000 for the work.

Alden stood by the review Thursday, calling the city's rebuttal "ludicrous" and "junk."

If anything, "I went easy on them," he said. "They called me biased, but my report is independent of both parties. I was very thorough and relied upon their (the city's) numbers. The problem is they don't know what they're doing."

Wood contrasted Alden's review with one completed in May by an accountant for the city's firefighters union, as part of that union's concession talks with the city.

The latter review found that a decline in property tax revenue "has been a significant financial impact to the city" that "represents a 60 percent decline" in revenue.

"There just doesn't appear to be a lot of extra funds in the general fund at the current time," it said.

The firefighters review also said that the city "did overbudget expenditures" in fiscal year 2010 "by approximately $9 million" but said 2011's revenue and expenditures "look on track with the budget in the general fund."

It also recommended that the city re-evaluate some of its budgeted reserves and transfers that "can be used to reduce the general fund deficit" and "will provide some relief between the employee concessions requested and what is truly needed."

The city's firefighter union, IAFF Local 1607, "has come to the table" and shown willingness to compromise, Wood said.

But the police union wants "to make this about layoffs," she said. "It's not layoffs. It's the fact that they don't want to give up anything, take any pay cuts. They don't care who pays for them as long as they don't have to take any hits, and it is not fair."

The city employs 290 police officers, 119 corrections officers, 21 full-time and 12 part-time marshals, according to the Police Department.

Alden's review, which looked at the city's audited financial statements from 2006 to 2010, also said:

■ North Las Vegas has a lower number of police officers than the national average. While the average is 29 police officers per 10,000 residents, it is only 21 per 10,000 residents in the city.

"Rather than laying off police officers, the city should be hiring them," Allen said.

The city responded that the average Alden used was that for the country's largest cities, "not the national average in general," and that the data he used were 13 to 15 years old.

■ During a separate 2003 "forensic accounting investigation" of alleged losses of funds in the city jail's inmate commissary accounts, which was also conducted in part by Alden, the city's Finance Department "tried to impede the investigation on numerous occasions" and the city "had no effective internal and cash accountability controls" at the jail.

The city responded that the 2003 matter was "completely outside the scope" of the current audit and raised "the question of bias and/or lack of impartiality."

Alden said he included the item to show the city's historical "lack of financial integrity."

■ The city's utility funds "are holding over $36 million" on which restrictions were placed by the City Council. The union has argued that the city should use some of those funds to avoid laying off police officers. The city says it cannot use funds raised and meant for utilities for other expenses.

But the city has for decades used some of the money it collects in water and wastewater fees to shore up the general fund. The council in 2009 voted to cap at $32 million the amount the city transfers out of its utility fund into its general fund each year. During this year's legislative session, a law was passed that limits the amount of such transfers. North Las Vegas has 10 years to "wean itself" off its dependence on the money for the general fund, Wood said.

■ North Las Vegas' 2012 budget doesn't "reflect fair and equitable sharing of expense reductions for all departments," and "public safety should be the top policy issue" in the city.

Allen said the review shows that the city "is misallocating its resources ... and they've basically got their priorities jumbled."

Wood said the union is being unreasonable.

"It is so incredibly difficult to deal with people who know better and deliberately skew the facts," she said. "They are not working to forge relationships."

Most of the City Council has voted ifor budget cuts that include public safety, saying they had no choice if they wanted to keep the city solvent. But Mayor Shari Buck has repeatedly voted against cuts to public safety, saying it should be the city's priority.

She declined to comment on the financial review Thursday, saying she had not yet seen it.

North Las Vegas has experienced plummeting property tax and other revenues during the recession. The city has gone through several rounds of budget cuts since late 2008 and eliminated or frozen nearly 900 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, and millions of dollars, to a new lockup for federal inmates in Pahrump.

The city currently employs about 1,600 people.

The council approved a 2011-12 operating budget of $125 million, compared with $149.5 million in 2010-11. The city's public safety spending accounts for well over half of its budget.

Fiscal year 2012 starts July 1 and runs through June 30, 2012.

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