Las Vegas Sun

November 23, 2014

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LAS VEGAS CITY HALL:

Union accepts reduced raises to help in crisis

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As Las Vegas struggles with its worst budget crisis in years, the city has reached an important agreement with the union representing about 1,500 municipal workers.

The deal will be “a major factor” in helping to avoid the $150 million shortfall the city is facing over the next five years, the City Council has announced.

A Memorandum of Understanding between the city and the Las Vegas City Employees’ Association, set to be approved at Wednesday’s council meeting, provides for a reduction in the annual cost-of-living, or COLA, raises for city workers by up to 1 percentage point for the next five years, effective in June.

Currently, 93 percent of city workers, those represented by a union, receive 3.5 percent COLA raises. Instead, they’ll be getting as little as 2.5 percent, assuming the agreement is ratified. That doesn’t include additional merit and “step” raises — automatic pay hikes built into the salary scales for certain positions — that will be maintained.

The pact is set to be voted on by the union’s membership on Monday, according to association President Tommy Ricketts.

So far, the three other labor unions that represent city workers — including firefighters, marshals and detention workers — have yet to reach such agreements with the city. But talks with at least one of those unions have started in earnest, one union source says.

At the last council meeting on the topic, on Dec. 3, Mayor Oscar Goodman threatened layoffs if agreements couldn’t be reached.

“If we’re going to cut, I want to be prepared,” Goodman said before formally asking for the names and positions of 5 percent of employees from every department.

The agreement between the city and the employees association would extend their collective bargaining agreement for three years, to 2014.

After 2009, according to the agreement, the council would have to approve a resolution each year as part of the budget approval process “declaring that without a reduction in the scheduled raises, that it would not be possible for the City to balance the budget with revenues as projected.”

The agreement provides that any raises for appointive and executive employees not represented by a union be limited to the average pay bump received by the unionized workers.

It also notes that approval of the agreement is conditioned on the city having made “reasonable efforts to negotiate or secure similar or more stringent terms” with the three other employee unions.

One of the chief goals of the employees union, if not its main objective, has been to prevent layoffs. The agreement appears to offer some protections toward that end.

It requires that any layoffs be limited to instances in which: 1. workload has diminished to the point that current staff levels are no longer justified; 2. a city service is eliminated outright; 3. the city’s enterprise fund has a deficit that can be remedied only through a layoff; or 4. general fund revenues drop more than a certain amount during a six-month period.

Association President Ricketts said the deal was the best his union could hope for under the circumstances, and praised incoming City Manager Betsy Fretwell for her work on the issue. He said he expects his members to ratify it.

“Of course it’s 1 percent that our people are counting on, but it’s the right thing to do,” Ricketts said Friday.

A report recently released by a forensic accountant retained by three of the four unions could complicate matters. The unions had hired Beth Kohn-Cole of Reno to get an independent estimation of the city’s finances before agreeing to reduced raises.

According to the two-page Dec. 26 report, there are “pockets of funds” the city has failed to take into account when claiming its need to cut employee pay hikes.

Those include excess reserves Kohn-Cole said she found in the city’s internal service funds; money accrued by the three nonprofit corporations established by the city to promote residents’ health and welfare; and the city’s multipurpose fund, which has an unreserved balance used for a variety of small programs as dictated by the council.

These and other money Kohn-Cole listed total in the tens of millions of dollars.

“The City of Las Vegas was in the unique situation of having an excellent financial position at the beginning of the downturn to withstand some of the negative impacts,” Kohn-Cole wrote.

On Friday, Mark Vincent, the city’s interim deputy city manager, responded to the Kohn-Cole report in a six-page letter that took issue with each of her assertions. Kohn-Cole repeatedly misinterpreted city budget data, he said in a letter to the attorney for the Employees Association, wrongly suggesting that different types of city funds or assets were available for general use.

“Unfortunately, it is easy for someone unfamiliar with the complexities of our city budget to extract facts and figures out of context and misinterpret their meaning,” Vincent wrote.

Though the Kohn-Cole report didn’t stop the Employees Association from reaching agreement with the city, another union director said he wasn’t yet prepared to sit down with the city.

Chris Collins, executive director of the Las Vegas Police Protective Association, which represents city marshals, said he hadn’t seen the Kohn-Cole report.

Yet Collins said he’s seen other reports that have concluded that the city’s revenues are up and not down, as the city contends. Add that to what he’s heard about the Kohn-Cole report, and he said he still needs to be convinced the city’s demand for reduced raises is warranted.

He quickly added that his union is ready to sacrifice its fair share if necessary.

“Can the union justify at this point in time giving the money back?” Collins said. “We want to do our part if they need help.”

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