Sewer fee hike could help LV trim its deficit

Judy Odierna

Wednesday, April 23, 2003 | 8:30 a.m.

A projected $8 million deficit could be pared to $1 million if the Las Vegas City Council chooses to accept several recommendations that were to be made at a budget workshop today.

The recommendations include an increase in sewer fees and fees to developers, and it slims down the Metro Police request for a $28 million increase from the city next year to a $9.9 million raise.

The deficit would be further trimmed by an accounting measure that pays for a retroactive pay adjustment that could take effect in the next fiscal year, which begins July 1, with money set aside during this fiscal year, which ends June 30.

That would leave the city with a projected $1 million deficit for the year, but it also has a $56 million reserve fund. Local governments are not allowed to spend more than they collect in revenue, but the reserve fund gives the city a buffer.

The proposed budget for fiscal 2004 shows revenue at more than $389 million, but expenditures at more than $397 million. That compares with anticipated revenue in the current fiscal year of $365 million and spending at $366 million.

While the city staff is not proposing raising any property taxes to narrow next year's possible deficit, homeowners could see an increase in sewer fees. Currently, homeowners pay about $140 annually for for sewer service. If the increase is approved, they would see that raised by $40 to $50 a year.

For the past 10 years the city has had sewer fees 20 percent to 30 percent below what Clark County charges, said Mark Vincent, director of finance and business services.

The sanitation fee raise would bring in more than $2.5 million. The budget also includes fee increases that target development, which could bring in an additional $1 million.

In addition, the accounting for a one-time $3.6 million retroactive pay adjustment for contract negotiations will bring the city's 2004 deficit to just under $1 million, Vincent said. The adjustment was budgeted for the current fiscal year, and the money set aside this year will cover the expense if it falls next year, he said.

"This is a manageable budget," Vincent said. Because of the city's reserve fund, "we don't consider (the deficit) excessive," he said.

The Metro Police Department is getting an 11 percent increase in city funding. Metro, which is funded by the city and Clark County, is slated for a $9.9 million increase.

Metro had sought a $28 million increase from the city, and Sheriff Bill Young said he won't give up until he gets funding for the 103 extra officers he says he needs to support the growing Las Vegas Valley.

"You'll never hear me say it's OK, we'll make do or get by," Young said. "Until the City Council and Clark County commissioners tell me they can't fund it, I believe I still have a shot at it."

Vincent said his major concern lies in what he sees as a financial trend, which could eventually eat into the city's $56 million reserve over the next five years as the need for services increases and the revenue does not.

"This is the fourth year in a row where our revenue is in the 5 to 6 percent growth range," Vincent said. "It's barely allowing us to keep track with our contractual commitments and existing staff. If there's another year like this, we could be talking about layoffs next year."

As it is, the city is holding the line on new positions and other new spending, and budget officials are asking the City Council to focus its capital spending on renovating already existing projects instead of building new parks, fire stations and other structures that would then require the city to hire people to staff them.

Among new positions the city is not funding are 39 in detention and enforcement and 24 in fire and rescue.

The city will, however, be able to add 13 positions by eliminating 26 vacant ones. Some of those added positions will go to the detention and enforcement department.

Vincent said the city's tough economic times are due to a minimal increase in the consolidated tax base, which accounts for 48 percent of the city's revenue. The consolidated tax base represents the sales, cigarette, liquor and motor vehicle privilege tax revenues collected by the state and distributed to the counties and cities based on a five-year formula that considers assessed valuation and population. Property taxes make up about 20 percent of the revenue.