Henderson to trim expenses to cover $28.2 million shortfall

By Jeremy Twitchell

Wednesday, Oct. 8, 2008 | 3:03 a.m.

Henderson has directed its various departments to trim 10 percent of their operating budgets in order to make up for a projected $28.2 million revenue shortfall.

The city already has identified some basic recurring expenses in its budget related to fleet assessments and insurance payments that will trim $3.6 million without reducing services to citizens or employees, Henderson spokeswoman Cindy Herman said. The city also has instituted a hiring freeze on its 63 open positions that could save up to an additional $6 million.

Layoffs are not part of the plan at present, she said. The Police Department, which is recruiting, will not be affected by the hiring freeze but has been asked to look at other ways to reduce its expenses, she said.

“That’s the challenge that all of us have -- to see how lean and efficient we can be,” Herman said.

Any capital improvement projects that have not begun construction will be delayed, she said. That means projects like the joint police training facility Henderson had planned to build with Boulder City are on hold.

The projected $28.2 million shortfall is based on the city’s consolidated tax revenue income for July. The consolidated tax revenue is based on Henderson’s share of local sales tax income and makes up 90 percent of Henderson’s $238 million general operating fund.

Herman said Henderson is not immune to the national economic struggles resulting from the collapse of major investment banks and the federal bailout attempt.

“There are a number of economic factors that came into effect in September that have very much changed the landscape,” Herman said.

Though the city has built up a $12 million stabilization fund to help cover budget shortfalls, Herman said, the city does not want to deplete that fund because it would hurt its bond rating, which would limit its ability to resume projects when the economy rebounds.

When economic projections began to look sour earlier this year, Henderson Mayor James B. Gibson said that if the city had to cut, it would likely begin with the number of outside consultants it hires.

Henderson has the lowest employee-to-resident ratio in Southern Nevada, at 7.1 employees per 1,000 residents, but the cost of that is a heavy reliance on consultant work. Herman confirmed that consultant contracts would be under scrutiny.

“It’s something that each department will be looking at,” she said.

Jeremy Twitchell can be reached at 990-8928 or [email protected].