Economic chill freezes Vegas budget

By Sam Skolnik (contact)

Published Saturday, May 31, 2008 | 2 a.m.

Updated Saturday, May 31, 2008 | 2:37 p.m.

Chris Morris

In the coming year, Las Vegans can expect it to take more time to obtain business licenses.

It’ll take longer for graffiti to be cleaned up and for city workers to replace damaged street signs. Hours at several city pools will be cut, local parks and trails won’t be as well maintained and expansion of the city jail will be delayed.

These are just a few of the ways the local economic downturn will affect residents as Las Vegas confronts a budget crunch — one that might not end anytime soon.

According to the city’s top finance official, fiscal 2009, which starts July 1, won’t be the worst of it. Although the budget slump will bottom out in fiscal 2010, further cuts could be needed through 2012, he said.

“I don’t see it bouncing back quickly,” said Mark Vincent, the city’s finance and business services director.

Some city officials — most notably Mayor Oscar Goodman — are more optimistic than Vincent, but all say they’re girding for continued budgetary woes. They’re also using the economic downturn as a reason to find long-term ways to make the government more efficient.

City Manager Doug Selby informed the City Council at a special budget meeting May 20 that he had tapped Barbara Jackson, the former director of the city’s Leisure Services Department, to review the budget to find ways to streamline government. Her report is due in October.

In the $1.5 billion 2009 budget approved by the council May 20, expenses are expected to outpace revenues by about $20 million.

To cope with the shortfall, the city is freezing the equivalent of 186 positions, cutting travel and training programs, and reducing merit raises for nonunion workers.

Goodman is also more optimistic than his finance chief regarding the 2010 budget.

“I don’t agree with him,” Goodman said. “As he said, he’s a prognosticator, and it’s his best guess.”

Goodman said he thinks the housing slump — one of the main causes for the downturn, both regionally and nationally — will ease locally faster than many think, and the overall economy will follow suit.

The mayor touted the city’s Performance Plus program to reduce government waste and duplication. During the budget meeting, several city department heads said they had used the program to reduce spending.

Goodman and Councilman Steve Wolfson suggest that one answer to potential budget problems could be clear: cutting what Goodman termed the “quite generous” benefits for future city employees.

Because labor costs make up 75 percent of the budget, they say it makes sense to try to reduce those expenses. They say even if the city negotiates contracts that reduce future city workers’ health and retirement benefits and merit raises, Las Vegas still would be able to find strong applicants.

“I think we would still be able to get good-quality employees to come and work here,” Wolfson said.

To do this quickly, the city would need to renegotiate its contract with the roughly 1,500-member Las Vegas City Employees’ Association. Separate contracts with the labor groups for city firefighters and corrections officers also could be affected.

Tommy Ricketts, president of the Employees’ Association, said his group’s contract runs through 2011, but that he and city officials have informally begun talks about proposed cuts.

Ricketts disputes the notion that current worker benefits are overly generous. What’s more, he said, some city departments have staffing levels that haven’t increased since the 1970s, meaning workers are serving a significantly bigger population.

“They say it’s doom and gloom, but nobody’s really come to us and spelled out” the city’s financial problems, Ricketts said.

Selby said that in the current climate, fiscal conservatism and an emphasis on efficiency are wise courses.

Freezing certain positions, cutting costs in some departments and even scrapping programs — those are things the city is going to have to get used to doing if it wants to remain financially solvent, he said.

“Now it is not an option,” Selby said. “It’s mandatory that we do this stuff.”

During recent budget presentations to the council, the dreaded B-word — “bankruptcy” — slipped out once or twice. It must have sounded out of place — startling, even — to city leaders accustomed, over the past decade, to little but solid growth.

Selby said it’s his job to keep such talk far from becoming reality.

“My goal,” he said, “is to manage the budget to avoid that — to avoid even coming close.”

(Editor's note: This story has been corrected. In an earlier version Steve Wolfson was wrongly referred to as Howard Wolfson.)