Wednesday, March 17, 2004 | 11:04 a.m.
The union representing Clark County government employees is planning to hit back at county management this week, arguing that the county has the money not only to sustain existing employee compensation, but also to hire more workers.
The Service Employees International Union Local 1107 is reacting to comments by county management and Commission Chairman Chip Maxfield who alleged that the escalating payroll for employees is jeopardizing the ability of the county to hire new workers and provide services to the region's growing population.
County Manager Thom Reilly, Administrative Services Director Don Burnette and Finance Director George Stevens have argued that wages and benefits have gone up 41 percent since 1995, to an average of almost $76,500. Those increases outpaced the Western Consumer Price Index, a yardstick of costs and pay, which went up 23 percent in the same period.
County management and Maxfield have argued that the collective bargaining process should be changed, although Reilly has strenuously insisted that the goal is not to get rid of collective bargaining but to find some way to hold down compensation growth. Some outside observers, including members of the Legislature, however, have said the collective bargaining rights granted local government employees more than three decades ago need to be jettisoned.
Both sides agree that the county needs to hire more workers to serve the growing needs of the population, but how to get there is a point of sometimes rancorous dispute.
Union organizers argue that the numbers publicized by county management tell only part of the story, and the union's own numbers paint a different picture.
The local is planning two organizing meetings this week aimed as a "mass education campaign on a number of levels," said Jane McAlevey, the union's new executive director in Clark County.
The initial target audience will be union members, but the local also plans to carry the message to other unions, community and religious organizations, community advocates who depend on county services, politicians and opinion makers and ultimately the general public, McAlevey said.
"We're trying to get an accountable budget process," she said. "The goal is to let people know they are getting half-truths."
Local 1107 organizer Chris Salm said one issue is that the portion of the budget going to employees' compensation has declined in each of the last five years.
In fiscal year 1999, the county committed 54.7 percent of its revenues to compensation. By 2003, that percentage had dropped to 51.6 percent, even though the county had added more than 500 new positions in those years, he said.
Stevens, the county finance director, said those percentages do not include employee costs in separate funds, such as the county's share of funding for the Metropolitan Police Department. When those costs are included, the county consistently spends about 65 percent of its budget on employee compensation, he said.
Salm said the figures he is using come from the county's own comprehensive annual financial report, which is audited annually.
McAlevey and Salm argue that the county has untapped resources that could help pay for new workers without throwing out collective bargaining. The county has a fund balance of about $109 million. Even setting aside about $80 million for the county's ready cash, that leaves more than the $28 million amount that the county management said is needed to hire new workers.
And, McAlevey and Salm said, the county knowingly underestimates revenues and overestimates costs, a practice that makes the compensation issue look bigger than it is and also gives the county management tens of millions of dollars to use for off-budget purposes at the end of the year.
"It makes it easier to manipulate the money," McAlevey said.
Salm said that since 2001, the practice has allowed the county to put $98 million more than budgeted into its capital projects fund.
Finance Director Stevens said he would resist an effort to cut the cash balance to fund new positions.
A balance of $80 million is only one month's worth of expenditures, Stevens said. Stevens, who does not like it when the general fund balance is called a "rainy day fund," said the balance is an important cushion but does not truly reflect cash-on-hand, because it includes sales-tax revenue collected by the state government but not dispersed to the county yet.
He said another problem with the union's solution is that hiring new workers would be an annual drain on the county's coffers.
"Your fund balance is one-time cash," Stevens said. "If you draw that down by $28 million and spend that in one year, where do you get that for the second year?"
Stevens agrees that the county underestimates revenue and overestimates costs, which does leave some room at the end of the year for critical capital projects. Still, that doesn't mean the county is rolling in cash.
"At the end of the day, the amount we are able to spend on capital projects is way below where it should be," he said.
The end result of the county's conservative fiscal approach is a very good bond rating, he said. The county's bond rating is the best among local governments in Nevada, and equal the state's rating.
That means the county can borrow money for large projects at very low interest rates, ultimately saving the taxpayers' money, Stevens said. Changing those conservative practices could endanger the county's bond rating, he warned.
Kathy Ong, a financial analyst with Hobbs, Ong and Associates, said a downgrade could be potentially expensive. A hypothetical $200 million, uninsured issue would cost taxpayers about $140,000 more annually over 20 years, for a total cost of about $2.8 million, she said.
County management argues that the debate over employees' compensation should not be about its handling of financial affairs, but over the growth in costs. Reilly said the union and the county need to sit down and discuss the issue -- and he rebuked the union for personalizing the debate and spoiling the atmosphere for any discussion.
He cited a flier distributed by the union last week, which featured three cartoons of Reilly with two heads. The flier promoting this week's employee meetings is titled "The Two Faces of Thom Reilly," and quotes local media to suggest Reilly is attacking employee salaries and collective bargaining.
"I don't understand why, on an issue of this importance, why the union would personalize it," Reilly said. "The concern continues to be how we can maintain a sustainable workforce. We can talk about the issues or we can personalize it. Some people in the union want to personalize it."
Reilly said he has had to respond to three charges that he wants to reopen contract negotiations, which do not come up again until 2006, that he wants to cut pay by 10 percent, and that he wants to eliminate collective bargaining. None of those charges are true, he said.
The union, however, said Reilly and his managers started the acrimonious tone that now colors the debate.
"Unfortunately, we're well past personalizing this," McAlevey said. "The personal attack has been the 20-some-odd articles that have every county worker feeling bad about going to work. The first personal attack started with the county manager's office."
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