Raiding step pay raises could turn costly

By David McGrath Schwartz, Cy Ryan

Wednesday, Dec. 10, 2008 | 2 a.m.

If Gov. Jim Gibbons succeeds in suspending step raises for state employees and teachers, it would be the first time in at least 45 years that the state has not paid the built-in salary increases.

The annual pay raises, which average 4.5 percent, are typically granted during state workers’ first 10 years of employment. Doing away with the step increases and cost-of-living raises would save the state about $160 million over the biennium, said Andrew Clinger, the governor’s budget director.

The state has left the step raises untouched since at least 1963.

Nevada faces a $1.5 billion budget deficit for the 2010 and 2011 fiscal years.

Although the call to suspend raises for state employees and teachers could save the state millions, according to teachers union leaders, it might cost school districts millions.

Lynn Warne, president of the Nevada State Education Association, said unions have contracts with county school districts guaranteeing the raises. So it’s possible, she said, that the districts would have to make up the shortfall for teachers.

“Unfortunately, he’s (Gibbons) trying to solve the state’s problems on the back of an education system that has already had to cut,” Warne said. “The fact he’s going after contractually negotiated raises with school districts is outrageous.”

In response to the teachers union argument that districts might be forced to pay the raise if the state doesn’t, Josh Hicks, Gibbons’ chief of staff, said: “We’ve heard those same comments but no actual contracts have been provided to this office so we cannot comment on whether there is any merit to the statement.”

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Erroneous charges on agencies’ power bills could be costing Nevada hundreds of thousands of dollars, according to executives with a company contracted to help eliminate such waste.

“Most people treat their bills as the Bible,” says Matthew Berke, president of LPB Energy Management of Dallas, which was hired by the state to find energy savings.

The company will scour the electric, natural gas, water and sewage bills of state agencies to find overcharges.

If an overpayment is found, LPB, which has similar contracts in at least five other states and with private business, will keep 50 percent of the recovered funds.

The state Board of Examiners approved a five-year contract with the Texas company.

Treasurer Kate Marshall said the agreement could save taxpayers as much as $1 million over that period.

For instance, the company found lighting bills for the stadium where the NFL’s Dallas Cowboys play included $51,000 in excess charges, Berke said.

The company will also automate agencies’ billing systems. The company will be paid a flat fee for that work.

“Centralizing bill processing with LPB will save the state up to $20 per invoice in processing costs and yield the insight necessary to reduce ongoing energy costs and usage,” Berke said.

The company will also gather data to see whether energy-saving devices purchased by state agencies are actually reducing costs.

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Gibbons signed into law on Tuesday the four bills passed during the Legislature’s special session a day earlier.

A news release announcing the bill signing mentioned there would be no accompanying “formal ceremony.” But Gibbons’ communications director said nothing should be read into the absence of pomp at the governor’s signing of lawmakers’ work to close a $341 million hole in the state budget.

“There wasn’t time to put a ceremony together,” Daniel Burns said. “We were told they (the bills) would be ready and he had an opening in his schedule. It’s just a piece of business we wanted to get out of the way.”

Gibbons signed the four bills in front of a few cameras and reporters, and answered questions. He said this deal provides a “blueprint” for how political leaders in the state could put aside partisan differences to work toward solutions.

Assistant Managing Editor Michael Squires contributed to this report.