Officials opt for quick fix on county budget

By Joe Schoenmann

Tuesday, May 18, 2010 | 2 a.m.

Clark County will use financial sleight of hand to balance its budget, sparing county staff from tough calls on spending cuts and letting county employee unions off the hook in contract negotiations, according to the lone county commissioner to vote against approving the spending plan Monday.

Commissioner Steve Sisolak said the 8 percent budget-cut plan that each county department submitted almost three weeks ago will be watered down and public employee unions will fight harder against concessions after the county plugged the hole in its upcoming budget by tapping $73 million in capital funds and another $55 million in cash reserves. The county is currently in negotiations with its employee unions.

Hurt in all of this will be the county’s bond rating and ability to create private-sector construction jobs by funding public works projects, he said.

“If the county can balance its budget this way, why should the unions concede anything?” said Sisolak, who appeared discouraged following the vote. “Instead of facing our problems head on, we put it off again.”

The remarks came during an adversarial day in the commission’s chambers, largely pitting Sisolak against county and other local agency heads over budgets and employee pay.

The question underlying the debate: whether the county should expect a quick return to the days of full coffers and rising revenue — justifying a quick fix now — or steel itself for an extended downturn with deep cuts.

County staff countered Sisolak’s criticisms by saying the “final” budget isn’t final at all. But state law requires the county to submit a balanced budget by June 1.

And County Manager Virginia Valentine said the 8 percent budget cuts aren’t forgotten; they are still being reviewed by staff.

Valentine and Chief Financial Officer George Stevens agreed that the failure to make additional cuts now would bring dire consequences next year, when the money transferred from capital and reserve funds to balance the budget won’t be available.

“We would have to cut 1,000 people next (fiscal) year” if more isn’t done this year, Stevens said.

Sisolak, however, recalls similar warnings last year — that if serious cuts weren’t made, the county would face mass layoffs this year.

Just last month county officials warned that a $57 million budget gap would lead to layoffs and/or reductions in pay and benefits of up to 14 percent.

“But then they find this money to fill in the gaps,” Sisolak said, calling the maneuvers an “accounting game.”

“It’s no wonder people think we have money in pockets everywhere, when we can come in and do this,” he said after the meeting. “I don’t believe it anymore, either. We’re like the boy who cried wolf. You cry wolf so many times and people stop believing.”

The final general fund budget that was approved is for $1.26 billion versus the current fiscal year budget of $1.33 billion. Falling property tax revenue — estimated at 21 percent in the past year — is largely responsible for the need to cut costs.

Some commissioners appeared to take offense at Sisolak’s criticisms, saying they have overseen cuts in the past few years that show the county is in front of the budget crisis.

Commission Chairman Rory Reid said: “The reason we have the money available today is because of tough decisions ... but we’re not done. Labor costs are not sustainable. (University Medical Center) is not sustainable. We’re going to pass the budget today knowing that ... it is a work that is not done ... Unless our employees cooperate, this will not be sustainable.”

Commissioner Chris Giunchigliani said she would not “sit here and try to Monday-morning quarterback what we could, should and would have done.” She acknowledged the county won’t have big fund reserves to tap next year, but “hopefully our economy starts to turn around.”

She then added, “whatever construction is going on is due to local government.”

Sisolak countered that the $73 million taken from the capital funds to balance the budget is the same money that would have created some of those public construction jobs.

The commission also heard Monday that the Las Vegas Valley Water District’s budget will increase from $356 million to $367 million despite declines in revenue from connection fees.

Southern Nevada Water Authority General Manager Pat Mulroy said the increase is largely due to the rising cost of employee pension and health insurance benefits. “There are no increases in salary,” she said.

“But they are still increases,” Sisolak said. “And still being borne by the ratepayer ... we simply don’t have the money and somehow we keep finding the money, whether it’s through rate increases or reserves, and that’s troubling.”

After the meeting, Reid and Sisolak stood in the hallway before TV cameras doing interviews for local news. Sisolak looked beaten down. Reid looked irritated.

“It doesn’t do any good to jump up and down and wave your arms and yell,” Reid said. “We need to speak clearly to our employees and tell them: ‘We cannot afford to pay them what we are.’ And if they are unwilling to lower salaries, we’ll have to make some unfortunate decisions.”