Some requests to be ignored as city tightens budget

Diana Sahagun

Wednesday, April 3, 2002 | 8:42 a.m.

Last year's consolidated tax shift has continued to chip away at revenues in Las Vegas, leaving the city with a bare-bones budget forecast for the upcoming fiscal year.

The city is expecting a 5.5 to 6 percent increase in the 2003 fiscal year budget, which begins July 1, said Mark Vincent, the city's finance director. The city will be in better shape than last year, but will continue to struggle with needs outweighing available funding.

"It's enough to do some things, but certainly we cannot do all the things that the council would like us to do," Vincent said. "At this point, we are not looking at cuts.

"It is a tight budget in the sense that there is no way we will have enough to meet all the requests for resources. It's more important than ever that we strategize about which resources we bring on. We just can't meet all the demands."

Although the city has enjoyed excess revenue in the past, the 2003 fiscal year would be the second year in a row that revenues have dwindled because of slowing growth. In the 2002 fiscal year, the budget grew by 4 percent from the prior year. The projected 5.5 to 6 percent increase for the next fiscal year does not include funding from a fire safety initiative approved in 2000, Vincent said.

City officials, who are in the midst of finalizing the tentative budget, say the city was hit hardest by cuts to its biggest revenue stream, consolidated tax.

The formula was changed during last year's Legislative session, taking tax revenue from local governments to provide financial assistance to fast-growing Henderson.

The city is also still feeling the effects of Sept. 11, City Manager Virginia Valentine said.

The council will discuss the tentative budget during a workshop scheduled for April 15. The final hearing on the budget is scheduled for May 14, before the budget is due to the state on June 1.

While consolidated tax revenue has decreased, other revenue streams have increased, Vincent said, including property tax and the fire safety initiative. Vincent expects a $365 million general fund.

Mayor Oscar Goodman said last week that the preliminary budget shows a $1 million shortfall, but he expects city officials to be able to "massage" the numbers.

Goodman said he does not expect a property tax hike will be needed to cover revenue losses.

Vincent said a good portion of the shortfall is due to contractual salary increases for Metro Police and firefighters. The city has been negotiating with the Las Vegas Firefighters Local 1285 for a year over its contract. Once the contract is approved, there will likely be a one-time retroactive payment to cover salary increases, Vincent said.

Valentine said with revenues dwindling, the council will have to make tough decisions on what should be funded and what can be scaled back.

Those decisions should be made easier by a list of priorities that the council approved in December, which includes supporting neighborhood integrity, resolving escalating costs of running the city, maintaining the master-planning approach, aggressively attracting diverse businesses and revitalizing the city's mature areas.

"I think that list of priorities outlines the top group of choices that they'll be making going into the budget workshop," Valentine said. "Some of those needs will definitely directly compete with each other."

In an effort to stop escalating staff costs, Vincent is recommending that the city eliminate 16 staff positions that have been vacant nine months or longer.

The city implemented a hiring freeze this year -- a total of 27 positions were frozen -- as a means to save money.

Vincent said not all of the positions requested by departments will be funded, but there will not likely be cuts in staffing.