Editorial: Do the math, formally, via official audit

Thursday, Aug. 5, 2004 | 9:55 a.m.

Of the local governments in the Las Vegas Valley, only the city of Las Vegas offers an early retirement program. Mathematically, such programs work. Longtime employees, with their senior-level salaries and benefits, are paid lump sums (according to a formula based on their current salary and years of service) as incentives to retire immediately. Many of these positions are then held open for months, saving money, and when the retirees are eventually replaced, salaries and benefits for the new employees are considerably lower. A voluntary early retirement program now under way in the city of Las Vegas is projected to save $1.5 million.

Henderson and North Las Vegas have not been offering the program and have no intention of doing so. Explaining to the Sun why they don't, North Las Vegas officials said any monetary savings wouldn't be worth the loss of their experienced employees.

And Clark County recently ended its program. The county's decision came after an audit of the employees who took advantage of the program between July 1, 1999 and June 30, 2002. Auditors found modest monetary savings, but noted that departments could not show how their participation in the program affected the county aside from saving money. A big question was whether service to the taxpayers would be affected by the loss of experienced employees. Another was if a position can be held open for months, why is it even necessary?

The inability to determine this impact, and the fact that many of the participating employees may have been planning to retire anyway, without a buyout, represents "a deficiency in the original program approval process," the auditors noted.

Las Vegas officials acknowledge that losing experienced employees is a "downside" of the program. But they point out that only 65 employees are taking advantage of this year's program -- out of 2,600 full-time and 400 part-time employees. The city's Finance and Business Services Department evaluates the program before it is offered to ensure, on paper, that it represents a cost savings. Nevertheless, we believe a formal audit of past offerings, such as the one conducted by the county, is warranted. What if the city's program also has a "deficiency?" Only an audit could say for sure.