City had planned for short economic downturn

Diana Sahagun

Thursday, Oct. 4, 2001 | 9:20 a.m.

The city of Las Vegas can weather the short-term economic storm caused by the Sept. 11 terrorist attacks, but any long-term effects could be more difficult to overcome, officials said.

The City Council was told Wednesday that the economic hit felt throughout Las Vegas in the weeks after the attacks would not significantly affect the city's revenue base because officials had planned for a such a downturn earlier this year.

However, they said that if the economy doesn't pick up and sufficient revenues are not generated to cover anticipated costs, the city may be in trouble.

The city anticipated an economic downturn as it was finalizing its budget for the current fiscal year, which began July 1. With a decline in building permits and a decrease in property taxes, the city in February instituted a hiring freeze and implemented measures to conserve energy.

Those measures saved the city millions, Deputy City Manager Steven Houchens said.

As gaming companies attempt to recover from weeks of low visitor volume, the city estimates that it took a $1.5 million hit based on a decrease in sales tax revenues.

If there is another significant decline in visitor volume, officials say the city could lose $5 million to $7 million in sales tax revenue this fiscal year.

If the city does experience a dramatic reduction in revenue, Finance Director Mark Vincent said, the council may want to consider keeping the reserve fund, as opposed to moving it into the 2003 budget.

The city has set aside $30 million for capital improvements, the construction of city buildings and other projects that, in a worst-case scenario, could be used, Vincent said.

Councilwoman Lynette Boggs McDonald suggested the city look into offering a voluntary separation program for employees who qualify.

"Based on past experience, the city has always taken a cautious approach," she said.