Audit recommendations could save city millions

Erin Neff

Tuesday, April 11, 2000 | 10:07 a.m.

An audit examining citywide payroll practices in Las Vegas suggests that tying annual salary increases to the national Consumer Price Index could free millions of dollars for programs and services.

The payroll processes audit, completed March 30, shows annual cost of living adjustments for most employees in 1999 were significantly higher than the CPI increases governing the raises given the mayor and City Council.

"Most city employees have been receiving annual COLA adjustments higher than the annual increases of the CPI," the audit states.

Finance Director Mark Vincent suggests millions of dollars could be put toward city programs each year if salary raises were instead tied to a recognized index.

"It is becoming more and more of a problem in terms of allocating our revenue growth to programs and services," Vincent said. "In this budget we're working on now, it's costing me $15 million of our revenue just to keep pace with our contractual salaries."

Most of the city's budget is spent on its $183 million payroll. Annual raises are possible now given the good economy and the city's revenue growth, Vincent said.

"If there's an economic downturn, we could have a real problem funding existing salaries," Vincent said.

But if tying annual raises to the CPI or other index were easy, it would have been done by now.

"It was a struggle just trying to address this issue," said Philip Cheng, the acting city auditor. "I think that some people will have to open their minds."

Mikey Gluskin, president of the Las Vegas Employees Association, was in arbitration Monday and today and unavailable for comment.

Nina Drake, the city's deputy director of human resources, said any such move toward adjusting salary raises is "truly a discussion that happens at the bargaining table."

Adjusting salary raises for the city's classified or appointed employees would require collective bargaining.

Four years ago when the current contract was negotiated with the city's three main unions, management raised the same issue.

"From a union's position, they're going to try to get the best possible salary for their employees," Drake said.

The current contracts governing the city, police and fire unions expire June 23, 2002.

"It's not too early to begin talking about what we need to do," Vincent said.

Although the city wants to save money, he said, it might not be worth tying salary increases to the CPI or related index if it cost the city valuable workers.

Local governments throughout Southern Nevada, including Clark County, all have annual COLA payments in excess of CPI.

If the city successfully bargains for a change in that practice, veteran workers may go to the county, where annual raises are higher.

"We recognize that city employee compensation is impacted by how other public and private sectors in the Las Vegas Valley compensate their employees," the audit states.

Although the audit recommends the city should work with other local entities to keep contractual increases in line with expected revenue growth, the mayor and council must make that decision.

"It absolutely has to be looked at realistically," Councilman Michael Mack said. "The CPI's going down and the COLA's going up. We have to respond to the taxpayers and the constituents just as we do to the (City Employees Association)."

The audit was conducted between November and February and examined the city's entire payroll practices.

Mack said he also thought increased efficiencies can be brought to other payroll issues to save money.

Erin Neff covers Las Vegas government for the Sun. She can be reached at (702) 259-4062 or 229-6436, or by e-mail at erin@lasvegassun.com