Las Vegas Sun

March 28, 2024

Henderson yanks car allowance as city tightens belt — again

Upper-level employees, officials targeted in fourth budget shrinkage in six months

Declining revenues forced the Henderson City Council to trim the city’s budget for the fourth time in six months Tuesday night.

This time, employees and officials at the city’s highest levels will bear the brunt of the cuts.

This round’s casualties were the city’s matching contributions to non-union employees’ retirement accounts, car allowances for elected and top-level city officials and the cost-of-living increase that non-union employees will see in July, all of which were eliminated.

The city will also be negotiating with its union-represented employees in the coming months to lower, but not eliminate, the annual cost-of-living increases that they receive.

Non-union employees are generally supervisors and executives. They constitute more than 350 of the city’s approximately 1,900 full-time workers. The car allowances that are being taken away were afforded to 63 employees, and the mayor and City Council have agreed to forego their monthly car allowances as well.

Combined, the moves will save the city an estimated $4 million per year.

The city has already shaved more than $53 million from the current budget year by trimming the budget of every department except public safety by 10 percent, instituting a hiring freeze, offering two rounds of employee buyouts and creating a furlough program.

So far, 76 employees have accepted the buyouts, and the city is looking for 15 more to accept a buyout in the current round, which ends May 14. Two department heads, Finance Director Steve Hanson and City Attorney Shauna Hughes, have accepted the buyout. Hughes is expected to leave the city in May; the Council named Assistant City Attorney Elizabeth Quillin as her replacement Tuesday night.

“What is clear is that we are in the business of turning over every stone,” Mayor James B. Gibson said. “To reach the end that we all have in mind, I think we have to do that. ... I’m starting to feel like we’re getting close to considering everything that is out there to consider.”

The most recent measures became necessary when city officials discovered a $4 million shortfall in revenues from the franchise fees that it collects from operators of utilities such as gas, electricity and cable.

The city charges the utility companies four percent of their revenue in Henderson for the use of city rights of way to lay transmission lines, fees which the companies pass on to the consumer.

But as the recession and foreclosure crisis have taken hold in the city, Henderson Finance Director Steve Hanson said, less money is coming in.

“We think the reason for that is that there are so many houses going into foreclosure and sitting vacant, so there’s no one in there to turn on the electricity, use the gas or pay those bills,” he said.

The City Council listed a failure to anticipate the franchise fee shortfalls among its reasons for terminating the contract of former City Manager Mary Kay Peck for cause April 14. Peck has disputed the charge through her attorney and the case appears to be headed to arbitration.

Hanson said that at this point, the city has essentially used up every discretionary fund at its disposal, including its $12.2 million rainy day fund. He said that any future budget-cutting measures will likely take the form of program cuts.

Each department will be asked in the coming weeks to come up with a plan for how it would cut another 15 percent of its budget, he said.

Every department, including the police and fire departments, will have to submit a plan, Hanson said.

“There is not going to be any exemption,” he said. “Everybody is going to have to step up to the plate.”

When the plans come in, Hanson said the city’s finance and budget team will meet with the City Council to prioritize the cuts.

“We’re not saying that we’re going to (make those cuts),” he said. “The hope, obviously, is that the economy will bottom out and the revenues will begin to come back so that we don’t have to make any more cuts. But if we have to, we don’t want to get caught without an answer.”

CORRECTION: This story was updated to clarify adjustments to employees' cost-of-living increases.

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