City looks to shave overtime to meet budget

By Jeremy Twitchell

Wednesday, Feb. 18, 2009 | 6:34 p.m.

Henderson has cut department budgets, tapped reserves, delayed projects and instituted a hiring freeze to cover a projected $53 million revenue shortfall in the current budget year, which ends June 30.

But the city is still weighing other methods to trim expenses, such as voluntary furlough days and lower annual cost-of-living wage increases, City Manager Mary Kay Peck said.

The city appears to have cut enough to make it to July 1, and a voluntary severance package that the city offered to employees is projected to save another $15 million over the next five years, Peck said.

Still, city officials may see if step pay increases with non-union employees can be renegotiated, if it can cap leave accruals and if it can better manage overtime.

"It's not just saying that we want to cut overtime by 10 percent per department, but rather looking at why overtime is being caused," Peck said.

Some departments, Peck said, have already instituted flexible scheduling to cut down on the need for overtime hours.

When the City Council passed a five-year budget plan in December, it did so with the instruction that city staff members who oversee the city's finances make regular reports.

Tuesday night was the first such report, and while there were some silver linings to be found, the overall picture was grim.

"The economic indicators show that we have not necessarily reached the bottom," Peck said.

Peck reported that unemployment spiked in Clark County in December, from 7.9 percent to 9.1 percent, while numbers for gaming revenue and tourism continued steady declines.

The city's consolidated tax revenue, which declined in the 2007 and 2008 budget years, is expected decline by more than 7 additional percent this year, Peck reported, and the city's property tax revenue is expected to decrease sharply next year as several thousand Clark County residents have asked the county's Board of Equalization to reassess their property tax in light of decreasing home values.

Peck said the one "small glimmer of hope" was that the number of foreclosures in Clark County decreased slightly in January after increasing for six straight months.

Members of Henderson's police and fire unions have until March 9 to consider the city's voluntary severance package, which was offered to employees whose age and years of service, when added together, were 65 or greater. The severance package includes two weeks pay for every year with the city and up to three months of health care coverage.

The city is expected to determine by the March 17 City Council meeting whether layoffs will be necessary, and city staff will report back to the council on the feasibility of furloughs and other ideas that are being weighed.

Clark County conducted a pilot program for furloughs, which are unpaid days off, from Dec. 17 to Jan. 23, during which time 811 employees took off 11,711 hours and saved the county $414,143, county spokesman Erik Pappa said.

Earlier this month, the Clark County Commission voted to authorize the furlough program to continue through Sept. 4.

"It was pretty successful, and we're hoping to pick up some additional savings once summer comes," Pappa said.

In the county program, employees are not eligible for a furlough if it would require another employee to work overtime, and Peck said Henderson would make the same requirement if it adopts a furlough program.

To address Henderson $53 million shortfall in the current year, which represents 20 percent of Henderson's $265 million budget, the council has cut $22 million in spending, delayed $8 million in construction projects, tapped various reserve funds for $22 million and changed its holiday pay structure to save an additional $1 million.

"In layman's terms, we've taken a 20 percent pay cut," Councilman Andy Hafen said. "That's a lot for a city to take. … We're not the federal government; we can't deficit spend. Whatever we take in is what we can spend."

Hafen added that the cuts the city has made have not affected its service to residents.

"We just need to assure residents that this city is run efficiently with what we have to deal with," he said.

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