Wednesday, April 6, 2011 | 1:50 p.m.
The cuts won't be as dramatic as they were last year, when Las Vegas city employees were asked to make major concessions in wages and benefits and many began working four days a week.
But next year's budget for the city of Las Vegas does show a deficit of $7.9 million, according to Candace Falder, the city's chief financial officer.
Falder, director of the Department of Finance, presented an overview of the city's tentative fiscal year 2012 budget Wednesday to the city council.
She said next year's budget shows revenue of about $447 million and expenses at $455 million, creating the $8 million gap.
"We have not built a tax increase into this budget," Falder said.
She said her office is working with the city's department heads to see where non-labor cuts can be made or where cost-cutting efficiencies can be made.
The city will file its tentative budget with the state on April 15. Then the city council will have a formal budget hearing on May 17 and will need to file its final budget with the state on June 1.
Falder told the council that during the last three years, the city has trimmed its budget by 20 percent, or by more than $115 million.
For the current fiscal year, which ends June 30, the city is estimating a budget of $461 million in its general fund, she said.
The biggest hit over the last year came to the public works department, which was reduced by 49.2 percent, or $15.8 million, with a budget of $16.3 million for this fiscal year.
"In general government, we reduced our budget from 2008 by 43.6 percent," Falder said. That was a cut of $37.1 million, leaving a budget of $48 million for the current fiscal year, she said.
In planning out next year's general fund budget in terms of personnel costs, she said there would be no cost of living adjustments for city employees, no "resets" of concessions made by city unions last year, a base adjustment for the employees' share in the state's Public Employees Retirement System, a $3 million cut in executive/appointive positions and additional rollbacks in employment costs.
For non-labor costs, she said they are starting with the assumption that all expenditures will remain the same as they were in 2011.
Falder said revenue for next year will drop from $461.6 million to $447.1 million.
"For consolidated tax, all we're anticipating is a modest CPI (Consumer Price Index) increase," she said. The C-tax is expected to increase from $206.5 million to $211.7 million, she said.
Property tax revenue is expected to drop from $102.8 million this year to $91.5 million in FY12, or an 11 percent reduction, she said.
Revenue from licensing and franchise fees are expected to stay the same, at $82.1 million, she said.
Transfers from non-general fund areas of the budget will decline from $14.6 million to $6.1 million, she said.
"We do not have any other other overages in the internal services funds, but we do have some interest that's been accrued in an enterprise fund and in one special revenue fund that we're transferring in for $6.1 million in one-time monies," she said.
"We see a shortfall of $7.9 million" for fiscal year 2012," she said. "The structural deficit would have been $14 million if we didn't have that interest to transfer in the $6.1 million."
Wages and benefits are $241 million this year and are expected to be $240.9 million next year, she said.
Metro Police, which provide law enforcement throughout Clark County, has been able to reduce its budget so that the city of Las Vegas' portion of the cost will go from $130.3 million this year to $122.3 for the upcoming fiscal year, she said.
Councilman Steve Wolfson said the nearly 10 percent cut in public safety over the last three years was one of the largest categories of cuts, amounting to $311 million.
Wolfson said the city has also asked about going even lower in its contribution to Metro Police from the $122.3 million expected for next year, she said.
"They are going back into their budget to see what they can do to lower the contribution by the city and the county," Falder said.
For FY 2012, the city's ending fund balance would be $67.3 million, which would be 15 percent, she said.
The council's policy had been to keep ending balances at 12 percent, but last year the council suspended that to 10 percent, she said. She said the 15 percent projected ending fund balance appeared to be "very good."
However, the trends they see in revenues over the next five years that are affected by sales taxes and a reduction in property tax revenue, "that 15 percent will be eaten into drastically over the next three to four years and will not come close to even being double-digit fund balance," she said.
"That's why we have to keep looking for ways to reduce our costs," Wolfson said.